Wall Street and The Bolsheviks

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WALL STREETAND THE

BOLSHEVIK 

REVOLUTION

ByAntony C. Sutton

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WALL STREET

AND THE

BOLSHEVIK 

REVOLUTION

By

Antony C. Sutton

TABLE OF CONTENTS

Preface

Chapter I: 

The Actors on the Revolutionary Stage

Chapter II: 

Trotsky Leaves New York to Complete the Revolution

Woodrow Wilson and a Passport for Trotsky  Canadian Government Documents on Trotsky's Release

  Canadian Military Intelligence Views Trotsky  Trotsky's Intentions and Objectives

Chapter III: 

Lenin and German Assistance for the Bolshevik Revolution

  The Sisson Documents  The Tug-of-War in Washington

Chapter IV: 

Wall Street and the World Revolution

  American Bankers and Tsarist Loans  Olof Aschberg in New York, 1916

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  Olof Aschberg in the Bolshevik Revolution   Nya Banken and Guaranty Trust Join Ruskombank   Guaranty Trust and German Espionage in the United States, 1914-

1917  The Guaranty Trust-Minotto-Caillaux Threads

Chapter V: 

The American Red Cross Mission in Russia — 1917

  American Red Cross Mission to Russia — 1917  American Red Cross Mission to Rumania  Thompson in Kerensky's Russia  Thompson Gives the Bolsheviks $1 Million  Socialist Mining Promoter Raymond Robins  The International Red Cross and Revolution

Chapter VI: 

Consolidation and Export of the Revolution

  A Consultation with Lloyd George

  Thompson's Intentions and Objectives  Thompson Returns to the United States  The Unofficial Ambassadors: Robins, Lockhart, and Sadoul  Exporting the Revolution: Jacob H. Rubin  Exporting the Revolution: Robert Minor 

Chapter VII: 

The Bolsheviks Return to New York 

  A Raid on the Soviet Bureau in New York   Corporate Allies for the Soviet Bureau  European Bankers Aid the Bolsheviks

Chapter VIII: 

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120 Broadway, New York City

  American International Corporation

  The Influence of American International on the Revolution  The Federal Reserve Bank of New York   American-Russian Industrial Syndicate Inc.  John Reed: Establishment Revolutionary  John Reed and the Metropolitan Magazine

Chapter IX: 

Guaranty Trust Goes to Russia

  Wall Street Comes to the Aid of Professor Lomonossoff   The Stage Is Set for Commercial Exploitation of Russia  Germany and the United States Struggle for Russian Business  Soviet Gold and American Banks  Max May of Guaranty Trust Becomes Director of Ruskombank 

Chapter X: 

J.P. Morgan Gives a Little Help to the Other Side

  United Americans Formed to Fight Communism  United Americans Reveals "Startling Disclosures" on Reds  Conclusions Concerning United Americans  Morgan and Rockefeller Aid Kolchak 

Chapter XI: 

The Alliance of Bankers and Revolution

  The Evidence Presented: A Synopsis  The Explanation for the Unholy Alliance  The Marburg Plan

Appendix I: 

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Directors of Major Banks,

Firms, and Institutions Mentioned

in This Book (as in 1917-1918) 

Appendix II: 

The Jewish-Conspiracy Theory of the

Bolshevik Revolution 

Appendix III: 

Selected Documents from Government

Files of the United States and Great Britain

Selected Bibliography

Index

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PREFACE

Since the early 1920s, numerous pamphlets and articles, even a few books, have sought to forge a link between "international bankers" and"Bolshevik revolutionaries." Rarely have these attempts been supported by hard evidence, and never have such attempts been argued within theframework of a scientific methodology. Indeed, some of the "evidence"

used in these efforts has been fraudulent, some has been irrelevant, muchcannot be checked. Examination of the topic by academic writers has been studiously avoided; probably because the hypothesis offends theneat dichotomy of capitalists versus Communists (and everyone knows,of course, that these are bitter enemies). Moreover, because a great dealthat has been written borders on the absurd, a sound academic reputationcould easily be wrecked on the shoals of ridicule. Reason enough toavoid the topic.

Fortunately, the State Department Decimal File, particularly the 861.00section, contains extensive documentation on the hypothesized link.When the evidence in these official papers is merged with nonofficialevidence from biographies, personal papers, and conventional histories,a truly fascinating story emerges.

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We find there was a link between some New York international bankersand many revolutionaries, including Bolsheviks. These bankinggentlemen — who are here identified — had a financial stake in, andwere rooting for, the success of the Bolshevik Revolution.

Who, why — and for how much — is the story in this book.

 Antony C. Sutton

March 1974

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Chapter I

THE ACTORS ON THE REVOLUTIONARY STAGE

Dear Mr. President:

I am in sympathy with the Soviet form of government as that best

suited for the Russian people...

 Letter to President Woodrow Wilson (October 17, 1918) from William

 Lawrence Saunders, chairman, Ingersoll- Rand Corp.; director,

 American International Corp.; and deputy chairman, Federal Reserve

 Bank of New York 

The frontispiece in this book was drawn by cartoonist Robert Minor in

1911 for the St. Louis Post-Dispatch. Minor was a talented artist andwriter who doubled as a Bolshevik revolutionary, got himself arrested inRussia in 1915 for alleged subversion, and was later bank-rolled by prominent Wall Street financiers. Minor's cartoon portrays a bearded, beaming Karl Marx standing in Wall Street with Socialism tucked under his arm and accepting the congratulations of financial luminaries J.P.Morgan, Morgan partner George W. Perkins, a smug John D.Rockefeller, John D. Ryan of National City Bank, and Teddy Roosevelt

 — prominently identified by his famous teeth — in the background.Wall Street is decorated by Red flags. The cheering crowd and theairborne hats suggest that Karl Marx must have been a fairly popular sort of fellow in the New York financial district.

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Was Robert Minor dreaming? On the contrary, we shall see that Minor was on firm ground in depicting an enthusiastic alliance of Wall Streetand Marxist socialism. The characters in Minor's cartoon — Karl Marx(symbolizing the future revolutionaries Lenin and Trotsky), J. P.

Morgan, John D. Rockefeller — and indeed Robert Minor himself, arealso prominent characters in this book.

The contradictions suggested by Minor's cartoon have been brushedunder the rug of history because they do not fit the accepted conceptualspectrum of political left and political right. Bolsheviks are at the leftend of the political spectrum and Wall Street financiers are at the rightend; therefore, we implicitly reason, the two groups have nothing in

common and any alliance between the two is absurd. Factors contrary tothis neat conceptual arrangement are usually rejected as bizarreobservations or unfortunate errors. Modern history possesses such a built-in duality and certainly if too many uncomfortable facts have beenrejected and brushed under the rug, it is an inaccurate history.

On the other hand, it may be observed that both the extreme right andthe extreme left of the conventional political spectrum are absolutelycollectivist. The national socialist (for example, the fascist) and the

international socialist (for example, the Communist) both recommendtotalitarian politico-economic systems based on naked, unfettered political power and individual coercion. Both systems require monopolycontrol of society. While monopoly control of industries was once theobjective of J. P. Morgan and J. D. Rockefeller, by the late nineteenthcentury the inner sanctums of Wall Street understood that the mostefficient way to gain an unchallenged monopoly was to "go political"and make society go to work for the monopolists — under the name of 

the public good and the public interest. This strategy was detailed in1906 by Frederick C. Howe in his Confessions of a Monopolist.1 Howe, by the way, is also a figure in the story of the Bolshevik Revolution.

Therefore, an alternative conceptual packaging of political ideas and politico-economic systems would be that of ranking the degree of 

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individual freedom versus the degree of centralized political control.Under such an ordering the corporate welfare state and socialism are atthe same end of the spectrum. Hence we see that attempts at monopolycontrol of society can have different labels while owning common

features.

Consequently, one barrier to mature understanding of recent history isthe notion that all capitalists are the bitter and unswerving enemies of allMarxists and socialists. This erroneous idea originated with Karl Marxand was undoubtedly useful to his purposes. In fact, the idea is nonsense.There has been a continuing, albeit concealed, alliance betweeninternational political capitalists and international revolutionary

socialists — to their mutual benefit. This alliance has gone unobservedlargely because historians — with a few notable exceptions — have anunconscious Marxian bias and are thus locked into the impossibility of any such alliance existing. The open-minded reader should bear twoclues in mind: monopoly capitalists are the bitter enemies of laissez-faireentrepreneurs; and, given the weaknesses of socialist central planning,the totalitarian socialist state is a perfect captive market for monopolycapitalists, if an alliance can be made with the socialist powerbrokers.Suppose — and it is only hypothesis at this point — that American

monopoly capitalists were able to reduce a planned socialist Russia tothe status of a captive technical colony? Would not this be the logicaltwentieth-century internationalist extension of the Morgan railroadmonopolies and the Rockefeller petroleum trust of the late nineteenthcentury?

Apart from Gabriel Kolko, Murray Rothbard, and the revisionists,historians have not been alert for such a combination of events.

Historical reporting, with rare exceptions, has been forced into adichotomy of capitalists versus socialists. George Kennan's monumentaland readable study of the Russian Revolution consistently maintains thisfiction of a Wall Street-Bolshevik dichotomy.2  Russia Leaves the War 

has a single incidental reference to the J.P. Morgan firm and noreference at all to Guaranty Trust Company. Yet both organizations are

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 prominently mentioned in the State Department files, to which frequentreference is made in this book, and both are part of the core of theevidence presented here. Neither self-admitted "Bolshevik banker" Olof Aschberg nor Nya Banken in Stockholm is mentioned in Kennan yet

 both were central to Bolshevik funding. Moreover, in minor yet crucialcircumstances, at least crucial for our argument, Kennan is factually inerror. For example, Kennan cites Federal Reserve Bank director WilliamBoyce Thompson as leaving Russia on November 27, 1917. Thisdeparture date would make it physically impossible for Thompson to bein Petrograd on December 2, 1917, to transmit a cable request for $1million to Morgan in New York. Thompson in fact left Petrograd onDecember 4, 1918, two days after sending the cable to New York. Then

again, Kennan states that on November 30, 1917, Trotsky delivered aspeech before the Petrograd Soviet in which he observed, "Today I hadhere in the Smolny Institute two Americans closely connected withAmerican Capitalist elements "According to Kennan, it "is difficult toimagine" who these two Americans "could have been, if not Robins andGumberg." But in [act Alexander Gumberg was Russian, not American.Further, as Thompson was still in Russia on November 30, 1917, thenthe two Americans who visited Trotsky were more than likely RaymondRobins, a mining promoter turned do-gooder, and Thompson, of theFederal Reserve Bank of New York.

The Bolshevization of Wall Street was known among well informedcircles as early as 1919. The financial journalist Barron recorded aconversation with oil magnate E. H. Doheny in 1919 and specificallynamed three prominent financiers, William Boyce Thompson, ThomasLamont and Charles R. Crane:

Aboard S.S. Aquitania, Friday Evening, February 1, 1919.Spent the evening with the Dohenys in their suite. Mr. Doheny said: If you believe in democracy you cannot believe in Socialism. Socialism isthe poison that destroys democracy. Democracy means opportunity for all. Socialism holds out the hope that a man can quit work and be better 

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off. Bolshevism is the true fruit of socialism and if you will read theinteresting testimony before the Senate Committee about the middle of January that showed up all these pacifists and peace-makers as Germansympathizers, Socialists, and Bolsheviks, you will see that a majority of 

the college professors in the United States are teaching socialism andBolshevism and that fifty-two college professors were on so-called peace committees in 1914. President Eliot of Harvard is teachingBolshevism. The worst Bolshevists in the United States are not onlycollege professors, of whom President Wilson is one, but capitalists andthe wives of capitalists and neither seem to know what they are talkingabout. William Boyce Thompson is teaching Bolshevism and he may yetconvert Lamont of J.P. Morgan & Company. Vanderlip is a Bolshevist,

so is Charles R. Crane. Many women are joining the movement andneither they, nor their husbands, know what it is, or what it leads to.Henry Ford is another and so are most of those one hundred historiansWilson took abroad with him in the foolish idea that history can teachyouth proper demarcations of races, peoples, and nationsgeographically.3

In brief, this is a story of the Bolshevik Revolution and its aftermath, buta story that departs from the usual conceptual straitjacket approach of 

capitalists versus Communists. Our story postulates a partnership between international monopoly capitalism and internationalrevolutionary socialism for their mutual benefit. The final human cost of this alliance has fallen upon the shoulders of the individual Russian andthe individual American. Entrepreneurship has been brought intodisrepute and the world has been propelled toward inefficient socialist planning as a result of these monopoly maneuverings in the world of  politics and revolution.

This is also a story reflecting the betrayal of the Russian Revolution. Thetsars and their corrupt political system were ejected only to be replaced by the new powerbrokers of another corrupt political system. Where theUnited States could have exerted its dominant influence to bring about afree Russia it truckled to the ambitions of a few Wall Street financiers

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who, for their own purposes, could accept a centralized tsarist Russia or a centralized Marxist Russia but not a decentralized free Russia. And thereasons for these assertions will unfold as we develop the underlyingand, so far, untold history of the Russian Revolution and its aftermath.4

Footnotes:

1"These are the rules of big business. They have superseded theteachings of our parents and are reducible to a simple maxim: Get amonopoly; let Society work for you: and remember that the best of all business is politics, for a legislative grant, franchise, subsidy or tax

exemption is worth more than a Kimberly or Comstock lode, since itdoes not require any labor, either mental or physical, lot its exploitation"(Chicago: Public Publishing, 1906), p. 157.

2George F. Kennan, Russia Leaves the War (New York: Atheneum,1967); and Decision to Intervene.. Soviet-American Relations, 1917-

1920 (Princeton, N.J.: Princeton University Press, 1958).

3Arthur Pound and Samuel Taylor Moore, They Told Barron (NewYork: Harper & Brothers, 1930), pp. 13-14.

4There is a parallel, and also unknown, history with respect to theMakhanovite movement that fought both the "Whites" and the "Reds" inthe Civil War of 1919-20 (see Voline, The Unknown Revolution [NewYork: Libertarian Book Club, 1953]). There was also the "Green"movement, which fought both Whites and Reds. The author has never seen even one isolated mention of the Greens in any history of the

Bolshevik Revolution. Yet the Green Army was at least 700,000 strong! 

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Chapter II

TROTSKY LEAVES NEW YORK TO COMPLETE THEREVOLUTION

You will have a revolution, a terrible revolution. What course it takeswill depend much on what Mr. Rockefeller tells Mr. Hague to do. Mr.Rockefeller is a symbol of the American ruling class and Mr. Hague is asymbol of its political tools.

 Leon Trotsky, in New York Times, December 13, 1938. (Hague was a

 New Jersey politician )

In 1916, the year preceding the Russian Revolution, internationalistLeon Trotsky was expelled from France, officially because of his participation in the Zimmerwald conference but also no doubt becauseof inflammatory articles written for  Nashe Slovo, a Russian-languagenewspaper printed in Paris. In September 1916 Trotsky was politelyescorted across the Spanish border by French police. A few days later Madrid police arrested the internationalist and lodged him in a "first-class cell" at a charge of one-and-one-haft pesetas per day. SubsequentlyTrotsky was taken to Cadiz, then to Barcelona finally to be placed on board the Spanish Transatlantic Company steamer Monserrat. Trotskyand family crossed the Atlantic Ocean and landed in New York onJanuary 13, 1917.

Other Trotskyites also made their way westward across the Atlantic.Indeed, one Trotskyite group acquired sufficient immediate influence in

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Mexico to write the Constitution of Querétaro for the revolutionary 1917Carranza government, giving Mexico the dubious distinction of beingthe first government in the world to adopt a Soviet-type constitution.

How did Trotsky, who knew only German and Russian, survive incapitalist America? According to his autobiography, My Life, "My only profession in New York was that of a revolutionary socialist." In other words, Trotsky wrote occasional articles for  Novy Mir, the New York Russian socialist journal. Yet we know that the Trotsky familyapartment in New York had a refrigerator and a telephone, and,according to Trotsky, that the family occasionally traveled in achauffeured limousine. This mode of living puzzled the two young

Trotsky boys. When they went into a tearoom, the boys would anxiouslydemand of their mother, "Why doesn't the chauffeur come in?"1 Thestylish living standard is also at odds with Trotsky's reported income.The only funds that Trotsky admits receiving in 1916 and 1917 are $310,and, said Trotsky, "I distributed the $310 among five emigrants whowere returning to Russia." Yet Trotsky had paid for a first-class cell inSpain, the Trotsky family had traveled across Europe to the UnitedStates, they had acquired an excellent apartment in New York — payingrent three months in advance — and they had use of a chauffeured

limousine. All this on the earnings of an impoverished revolutionary for a few articles for the low-circulation Russian-language newspaper  Nashe Slovo in Paris and Novy Mir in New York!

Joseph Nedava estimates Trotsky's 1917 income at $12.00 per week,"supplemented by some lecture fees."2 Trotsky was in New York in1917 for three months, from January to March, so that makes $144.00 inincome from Novy Mir and, say, another $100.00 in lecture fees, for a

total of $244.00. Of this $244.00 Trotsky was able to give away $310.00to his friends, pay for the New York apartment, provide for his family — and find the $10,000 that was taken from him in April 1917 by Canadianauthorities in Halifax. Trotsky claims that those who said he had other sources of income are "slanderers" spreading "stupid calumnies" and"lies," but unless Trotsky was playing the horses at the Jamaica

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racetrack, it can't be done. Obviously Trotsky had an unreported sourceof income.

What was that source? In The Road to Safety, author Arthur Willert says

Trotsky earned a living by working as an electrician for Fox FilmStudios. Other writers have cited other occupations, but there is noevidence that Trotsky occupied himself for remuneration otherwise than by writing and speaking.

Most investigation has centered on the verifiable fact that when Trotskyleft New York in 1917 for Petrograd, to organize the Bolshevik phase of the revolution, he left with $10,000. In 1919 the U.S. Senate OvermanCommittee investigated Bolshevik propaganda and German money inthe United States and incidentally touched on the source of Trotsky's$10,000. Examination of Colonel Hurban, Washington attaché to theCzech legation, by the Overman Committee yielded the following:

COL. HURBAN: Trotsky, perhaps, took money from Germany, butTrotsky will deny it. Lenin would not deny it. Miliukov proved that hegot $10,000 from some Germans while he was in America. Miliukovhad the proof, but he denied it. Trotsky did, although Miliukov had the

 proof.SENATOR OVERMAN: It was charged that Trotsky got $10,000 here.

COL. HURBAN: I do not remember how much it was, but I know it wasa question between him and Miliukov.

SENATOR OVERMAN: Miliukov proved it, did he?

COL. HURBAN: Yes, sir.SENATOR OVERMAN: Do you know where he got it from?

COL. HURBAN: I remember it was $10,000; but it is no matter. I willspeak about their propaganda. The German Government knew Russia

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 better than anybody, and they knew that with the help of those peoplethey could destroy the Russian army.

(At 5:45 o'clock p.m. the subcommittee adjourned until tomorrow,

Wednesday, February 19, at 10:30 o'clock a.m.)3

It is quite remarkable that the committee adjourned abruptly before the source of Trotsky's funds could be placed into the Senate record. Whenquestioning resumed the next day, Trotsky and his $10,000 were nolonger of interest to the Overman Committee. We shall later developevidence concerning the financing of German and revolutionaryactivities in the United States by New York financial houses; the originsof Trotsky's $10,000 will then come into focus.

An amount of $10,000 of German origin is also mentioned in the officialBritish telegram to Canadian naval authorities in Halifax, who requestedthat Trotsky and party en route to the revolution be taken off the S.S. Kristianiafjord (see page 28). We also learn from a British Directorateof Intelligence report4 that Gregory Weinstein, who in 1919 was to become a prominent member of the Soviet Bureau in New York,collected funds for Trotsky in New York. These funds originated in

Germany and were channeled through the Volks-zeitung, a German dailynewspaper in New York and subsidized by the German government.

While Trotsky's funds are officially reported as German, Trotsky wasactively engaged in American politics immediately prior to leaving NewYork for Russia and the revolution. On March 5, 1917, Americannewspapers headlined the increasing possibility of war with Germany;the same evening Trotsky proposed a resolution at the meeting of the New York County Socialist Party "pledging Socialists to encourage

strikes and resist recruiting in the event of war with Germany."5 LeonTrotsky was called by the New York Times "an exiled Russianrevolutionist." Louis C. Fraina, who cosponsored the Trotsky resolution,later — under an alias — wrote an uncritical book on the Morganfinancial empire entitled House of Morgan.6 The Trotsky-Fraina

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 proposal was opposed by the Morris Hillquit faction, and the SocialistParty subsequently voted opposition to the resolution.7

More than a week later, on March 16, at the time of the deposition of the

tsar, Leon Trotsky was interviewed in the offices of  Novy Mir.. Theinterview contained a prophetic statement on the Russian revolution:

"... the committee which has taken the place of the deposed Ministry inRussia did not represent the interests or the aims of the revolutionists,that it would probably be shortlived and step down in favor of men whowould be more sure to carry forward the democratization of Russia."8

The "men who would be more sure to carry forward the democratization

of Russia," that is, the Mensheviks and the Bolsheviks, were then inexile abroad and needed first to return to Russia. The temporary"committee" was therefore dubbed the Provisional Government, a title, itshould be noted, that was used from the start of the revolution in Marchand not applied ex post facto by historians.

WOODROW WILSON AND A PASSPORT FOR TROTSKY

President Woodrow Wilson was the fairy godmother who providedTrotsky with a passport to return to Russia to "carry forward" therevolution. This American passport was accompanied by a Russian entry permit and a British transit visa. Jennings C. Wise, in Woodrow Wilson:

 Disciple of Revolution, makes the pertinent comment, "Historians mustnever forget that Woodrow Wilson, despite the efforts of the British police, made it possible for Leon Trotsky to enter Russia with anAmerican passport."

President Wilson facilitated Trotsky's passage to Russia at the same timecareful State Department bureaucrats, concerned about suchrevolutionaries entering Russia, were unilaterally attempting to tightenup passport procedures. The Stockholm legation cabled the StateDepartment on June 13, 1917, just after Trotsky crossed the Finnish-

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Russian border, "Legation confidentially informed Russian, English andFrench passport offices at Russian frontier, Tornea, considerablyworried by passage of suspicious persons bearing American passports."9

To this cable the State Department replied, on the same day,"Department is exercising special care in issuance of passports for Russia"; the department also authorized expenditures by the legation toestablish a passport-control office in Stockholm and to hire an"absolutely dependable American citizen" for employment on controlwork.10 But the bird had flown the coop. Menshevik Trotsky withLenin's Bolsheviks were already in Russia preparing to "carry forward"the revolution. The passport net erected caught only more legitimate

 birds. For example, on June 26, 1917, Herman Bernstein, a reputable New York newspaperman on his way to Petrograd to represent the New

York Herald, was held at the border and refused entry to Russia.Somewhat tardily, in mid-August 1917 the Russian embassy inWashington requested the State Department (and State agreed) to"prevent the entry into Russia of criminals and anarchists... numbers of whom have already gone to Russia."11

Consequently, by virtue of preferential treatment for Trotsky, when the

S.S. Kristianiafjord left New York on March 26, 1917, Trotsky wasaboard and holding a U.S. passport — and in company with other Trotskyire revolutionaries, Wall Street financiers, AmericanCommunists, and other interesting persons, few of whom had embarkedfor legitimate business. This mixed bag of passengers has been described by Lincoln Steffens, the American Communist:

The passenger list was long and mysterious. Trotsky was in the steeragewith a group of revolutionaries; there was a Japanese revolutionist in mycabin. There were a lot of Dutch hurrying home from Java, the onlyinnocent people aboard. The rest were war messengers, two from WallStreet to Germany....12

 Notably, Lincoln Steffens was on board en route to Russia at the specificinvitation of Charles Richard Crane, a backer and a former chairman of 

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the Democratic Party's finance committee. Charles Crane, vice presidentof the Crane Company, had organized the Westinghouse Company inRussia, was a member of the Root mission to Russia, and had made nofewer than twenty-three visits to Russia between 1890 and 1930.

Richard Crane, his son, was confidential assistant to then Secretary of State Robert Lansing. According to the former ambassador to GermanyWilliam Dodd, Crane "did much to bring on the Kerensky revolutionwhich gave way to Communism."13 And so Steffens' comments in hisdiary about conversations aboard the S.S. Kristianiafjord are highly pertinent:" . . . all agree that the revolution is in its first phase only, thatit must grow. Crane and Russian radicals on the ship think we shall be inPetrograd for the re-revolution.14

Crane returned to the United States when the Bolshevik Revolution (thatis, "the re-revolution") had been completed and, although a privatecitizen, was given firsthand reports of the progress of the Bolshevik Revolution as cables were received at the State Department. For example, one memorandum, dated December 11, 1917, is entitled "Copyof report on Maximalist uprising for Mr Crane." It originated withMaddin Summers, U.S. consul general in Moscow, and the coveringletter from Summers reads in part:

I have the honor to enclose herewith a copy of same [above report] withthe request that it be sent for the confidential information of Mr. CharlesR. Crane. It is assumed that the Department will have no objection toMr. Crane seeing the report ....15

In brief, the unlikely and puzzling picture that emerges is that CharlesCrane, a friend and backer of Woodrow Wilson and a prominentfinancier and politician, had a known role in the "first" revolution andtraveled to Russia in mid-1917 in company with the AmericanCommunist Lincoln Steffens, who was in touch with both WoodrowWilson and Trotsky. The latter in turn was carrying a passport issued atthe orders of Wilson and $10,000 from supposed German sources. Onhis return to the U.S. after the "re-revolution," Crane was granted access

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to official documents concerning consolidation of the Bolshevik regime:This is a pattern of interlocking — if puzzling — events that warrantsfurther investigation and suggests, though without at this point providingevidence, some link between the financier Crane and the revolutionary

Trotsky.

CANADIAN GOVERNMENT DOCUMENTS ON TROTSKY'S

RELEASE16

Documents on Trotsky's brief stay in Canadian custody are now de-classified and available from the Canadian government archives.According to these archives, Trotsky was removed by Canadian andBritish naval personnel from the S.S. Kristianiafjord at Halifax, NovaScotia, on April 3, 1917, listed as a German prisoner of war, andinterned at the Amherst, Nova Scotia, internment station for German prisoners. Mrs. Trotsky, the two Trotsky boys, and five other mendescribed as "Russian Socialists" were also taken off and interned. Their names are recorded by the Canadian files as: Nickita Muchin, LeibaFisheleff, Konstantin Romanchanco, Gregor Teheodnovski, GerchonMelintchansky and Leon Bronstein Trotsky (all spellings from original

Canadian documents).

Canadian Army form LB-l, under serial number 1098 (including thumb prints), was completed for Trotsky, with a description as follows: "37years old, a political exile, occupation journalist, born in Gromskty,Chuson, Russia, Russian citizen." The form was signed by Leon Trotskyand his full name given as Leon Bromstein (sic) Trotsky.

The Trotsky party was removed from the S.S. Kristianiafjord under 

official instructions received by cablegram of March 29, 1917, London, presumably originating in the Admiralty with the naval control officer,Halifax. The cablegram reported that the Trotsky party was on the"Christianiafjord" (sic) and should be "taken off and retained pendinginstructions." The reason given to the naval control officer at Halifaxwas that "these are Russian Socialists leaving for purposes of starting

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revolution against present Russian government for which Trotsky isreported to have 10,000 dollars subscribed by Socialists and Germans."

On April 1, 1917, the naval control officer, Captain O. M. Makins, sent a

confidential memorandum to the general officer commanding at Halifax,to the effect that he had "examined all Russian passengers" aboard theS.S. Kristianiafjord and found six men in the second-class section:"They are all avowed Socialists, and though professing a desire to helpthe new Russian Govt., might well be in league with German Socialistsin America, and quite likely to be a great hindrance to the Govt. inRussia just at present." Captain Makins added that he was going toremove the group, as well as Trotsky's wife and two sons, in order to

intern them at Halifax. A copy of this report was forwarded from Halifaxto the chief of the General Staff in Ottawa on April 2, 1917.

The next document in the Canadian files is dated April 7, from the chief of the General Staff, Ottawa, to the director of internment operations,and acknowledges a previous letter (not in the files) about the internmentof Russian socialists at Amherst, Nova Scotia: ". . . in this connection,have to inform you of the receipt of a long telegram yesterday from theRussian Consul General, MONTREAL, protesting against the arrest of 

these men as they were in possession of passports issued by the RussianConsul General, NEW YORK, U.S.A."

The reply to this Montreal telegram was to the effect that the men wereinterned "on suspicion of being German," and would be released onlyupon definite proof of their nationality and loyalty to the Allies. Notelegrams from the Russian consul general in New York are in theCanadian files, and it is known that this office was reluctant to issueRussian passports to Russian political exiles. However, there is atelegram in the files from a New York attorney, N. Aleinikoff, to R. M.Coulter, then deputy postmaster general of Canada. The postmaster general's office in Canada had no connection with either internment of  prisoners of war or military activities. Accordingly, this telegram was inthe nature of a personal, nonofficial intervention. It reads:

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DR. R. M. COULTER, Postmaster Genl. OTTAWA Russian politicalexiles returning to Russia detained Halifax interned Amherst camp.Kindly investigate and advise cause of the detention and names of alldetained. Trust as champion of freedom you will intercede on their 

 behalf. Please wire collect. NICHOLAS ALEINIKOFF

On April 11, Coulter wired Aleinikoff, "Telegram received. Writing youthis afternoon. You should receive it tomorrow evening. R. M. Coulter."This telegram was sent by the Canadian Pacific Railway Telegraph butcharged to the Canadian Post Office Department. Normally a private business telegram would be charged to the recipient and this was notofficial business. The follow-up Coulter letter to Aleinikoff is interesting

 because, after confirming that the Trotsky party was held at Amherst, itstates that they were suspected of propaganda against the presentRussian government and "are supposed to be agents of Germany."Coulter then adds," . . . they are not what they represent themselves to be"; the Trotsky group is "...not detained by Canada, but by the Imperialauthorities." After assuring Aleinikoff that the detainees would be madecomfortable, Coulter adds that any information "in their favour" would be transmitted to the military authorities. The general impression of theletter is that while Coulter is sympathetic and fully aware of Trotsky's

 pro-German links, he is unwilling to get involved. On April 11 Arthur Wolf of 134 East Broadway, New York, sent a telegram to Coulter.Though sent from New York, this telegram, after being acknowledged,was also charged to the Canadian Post Office Department.

Coulter's reactions, however, reflect more than the detached sympathyevident in his letter to Aleinikoff. They must be considered in the lightof the fact that these letters in behalf of Trotsky came from two

American residents of New York City and involved a Canadian or Imperial military matter of international importance. Further, Coulter, asdeputy postmaster general, was a Canadian government official of somestanding. Ponder, for a moment, what would happen to someone whosimilarly intervened in United States affairs! In the Trotsky affair wehave two American residents corresponding with a Canadian deputy

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 postmaster general in order to intervene in behalf of an interned Russianrevolutionary.

Coulter's subsequent action also suggests something more than casual

intervention. After Coulter acknowledged the Aleinikoff and Wolf telegrams, he wrote to Major General Willoughby Gwatkin of theDepartment of Militia and Defense in Ottawa — a man of significantinfluence in the Canadian military — and attached copies of theAleinikoff and Wolf telegrams:

These men have been hostile to Russia because of the way the Jews have been treated, and are now strongly in favor of the presentAdministration, so far as I know. Both are responsible men. Both arereputable men, and I am sending their telegrams to you for what theymay be worth, and so that you may represent them to the Englishauthorities if you deem it wise.

Obviously Coulter knows — or intimates that he knows — a great dealabout Aleinikoff and Wolf. His letter was in effect a character reference,and aimed at the root of the internment problem — London. Gwatkinwas well known in London, and in fact was on loan to Canada from the

War Office in London.17

Aleinikoff then sent a letter to Coulter to thank him

most heartily for the interest you have taken in the fate of the RussianPolitical Exiles .... You know me, esteemed Dr. Coulter, and you alsoknow my devotion to the cause of Russian freedom .... Happily I knowMr. Trotsky, Mr. Melnichahnsky, and Mr. Chudnowsky . . . intimately.

It might be noted as an aside that if Aleinikoff knew Trotsky"intimately," then he would also probably be aware that Trotsky haddeclared his intention to return to Russia to overthrow the ProvisionalGovernment and institute the "re-revolution." On receipt of Aleinikoff'sletter, Coulter immediately (April 16) forwarded it to Major GeneralGwatkin, adding that he became acquainted with Aleinikoff "in

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connection with Departmental action on United States papers in theRussian language" and that Aleinikoff was working "on the same linesas Mr. Wolf . . . who was an escaped prisoner from Siberia."

Previously, on April 14, Gwatkin sent a memorandum to his navalcounterpart on the Canadian Military Interdepartmental Committeerepeating that the internees were Russian socialists with "10,000 dollarssubscribed by socialists and Germans." The concluding paragraphstated: "On the other hand there are those who declare that an act of high-handed injustice has been done." Then on April 16, Vice AdmiralC. E. Kingsmill, director of the Naval Service, took Gwatkin'sintervention at face value. In a letter to Captain Makins, the naval

control officer at Halifax, he stated, "The Militia authorities request thata decision as to their (that is, the six Russians) disposal may behastened." A copy of this instruction was relayed to Gwatkin who in turninformed Deputy Postmaster General Coulter. Three days later Gwatkinapplied pressure. In a memorandum of April 20 to the naval secretary,he wrote, "Can you say, please, whether or not the Naval Control Officehas given a decision?"

On the same day (April 20) Captain Makins wrote Admiral Kingsmill

explaining his reasons for removing Trotsky; he refused to be pressuredinto making a decision, stating, "I will cable to the Admiralty informingthem that the Militia authorities are requesting an early decision as totheir disposal." However, the next day, April 21, Gwatkin wrote Coulter:"Our friends the Russian socialists are to be released; and arrangementsare being made for their passage to Europe." The order to Makins for Trotsky's release originated in the Admiralty, London. Coulter acknowledged the information, "which will please our New York 

correspondents immensely."While we can, on the one hand, conclude that Coulter and Gwatkin wereintensely interested in the release of Trotsky, we do not, on the other hand, know why. There was little in the career of either Deputy

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Postmaster General Coulter or Major General Gwatkin that wouldexplain an urge to release the Menshevik Leon Trotsky.

Dr. Robert Miller Coulter was a medical doctor of Scottish and Irish

 parents, a liberal, a Freemason, and an Odd Fellow. He was appointeddeputy postmaster general of Canada in 1897. His sole claim to famederived from being a delegate to the Universal Postal Union Conventionin 1906 and a delegate to New Zealand and Australia in 1908 for the"All Red" project. All Red had nothing to do with Red revolutionaries; itwas only a plan for all-red or all-British fast steamships between GreatBritain, Canada, and Australia.

Major General Willoughby Gwatkin stemmed from a long Britishmilitary tradition (Cambridge and then Staff College). A specialist inmobilization, he served in Canada from 1905 to 1918. Given only thedocuments in the Canadian files, we can but conclude that their intervention in behalf of Trotsky is a mystery.

CANADIAN MILITARY INTELLIGENCE VIEWS TROTSKY

We can approach the Trotsky release case from another angle: Canadianintelligence. Lieutenant Colonel John Bayne MacLean, a prominentCanadian publisher and businessman, founder and president of MacLeanPublishing Company, Toronto, operated numerous Canadian trade journals, including the Financial Post. MacLean also had a long-timeassociation with Canadian Army Intelligence.18

In 1918 Colonel MacLean wrote for his own MacLean's magazine anarticle entitled "Why Did We Let Trotsky Go? How Canada Lost an

Opportunity to Shorten the War."19 The article contained detailed andunusual information about Leon Trotsky, although the last half of the piece wanders off into space remarking about barely related matters. Wehave two clues to the authenticity of the information. First, ColonelMacLean was a man of integrity with excellent connections in Canadiangovernment intelligence. Second, government records since released by

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Canada, Great Britain, and the United States confirm MacLean'sstatement to a significant degree. Some MacLean statements remain to be confirmed, but information available in the early 1970s is notnecessarily inconsistent with Colonel MacLean's article.

MacLean's opening argument is that "some Canadian politicians or officials were chiefly responsible for the prolongation of the war [WorldWar I], for the great loss of life, the wounds and sufferings of the winter of 1917 and the great drives of 1918."

Further, states MacLean, these persons were (in 1919)doing everything possible to prevent Parliament and the Canadian people from getting therelated facts. Official reports, including those of Sir Douglas Haig,demonstrate that but for the Russian break in 1917 the war would have been over a year earlier, and that "the man chiefly responsible for thedefection of Russia was Trotsky... acting under German instructions."

Who was Trotsky? According to MacLean, Trotsky was not Russian, butGerman. Odd as this assertion may appear it does coincide with other scraps of intelligence information: to wit, that Trotsky spoke better German than Russian, and that he was the Russian executive of the

German "Black Bond." According to MacLean, Trotsky in August 1914had been "ostentatiously" expelled from Berlin;20 he finally arrived inthe United States where he organized Russian revolutionaries, as well asrevolutionaries in Western Canada, who "were largely Germans andAustrians traveling as Russians." MacLean continues:

Originally the British found through Russian associates that Kerensky,21 

Lenin and some lesser leaders were practically in German pay as earlyas 1915 and they uncovered in 1916 the connections with Trotsky then

living in New York. From that time he was closely watched by... theBomb Squad. In the early part of 1916 a German official sailed for NewYork. British Intelligence officials accompanied him. He was held up atHalifax; but on their instruction he was passed on with profuse apologiesfor the necessary delay. After much manoeuvering he arrived in a dirtylittle newspaper office in the slums and there found Trotsky, to whom he

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 bore important instructions. From June 1916, until they passed him on[to] the British, the N.Y. Bomb Squad never lost touch with Trotsky.They discovered that his real name was Braunstein and that he was aGerman, not a Russian.22

Such German activity in neutral countries is confirmed in a StateDepartment report (316-9-764-9) describing organization of Russianrefugees for revolutionary purposes.

Continuing, MacLean states that Trotsky and four associates sailed onthe "S.S. Christiania" (sic), and on April 3 reported to "Captain Making"(sic) and were taken off the ship at Halifax under the direction of Lieutenant Jones. (Actually a party of nine, including six men, weretaken off the S.S. Kristianiafjord. The name of the naval control officer at Halifax was Captain O. M. Makins, R.N. The name of the officer whoremoved the Trotsky party from the ship is not in the Canadiangovernment documents; Trotsky said it was "Machen.") Again,according to MacLean, Trotsky's money came "from German sources in New York." Also:

generally the explanation given is that the release was done at the

request of Kerensky but months before this British officers and oneCanadian serving in Russia, who could speak the Russian language,reported to London and Washington that Kerensky was in Germanservice.23

Trotsky was released "at the request of the British Embassy atWashington . . . [which] acted on the request of the U.S. StateDepartment, who were acting for someone else." Canadian officials"were instructed to inform the press that Trotsky was an American

citizen travelling on an American passport; that his release was speciallydemanded by the Washington State Department." Moreover, writesMacLean, in Ottawa "Trotsky had, and continues to have, strongunderground influence. There his power was so great that orders wereissued that he must be given every consideration."

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The theme of MacLean's reporting is, quite evidently, that Trotsky hadintimate relations with, and probably worked for, the German GeneralStaff. While such relations have been established regarding Lenin — tothe extent that Lenin was subsidized and his return to Russia facilitated

 by the Germans — it appears certain that Trotsky was similarly aided.The $10,000 Trotsky fund in New York was from German sources, anda recently declassified document in the U.S. State Department files readsas follows:

March 9, 1918 to: American Consul, Vladivostok from Polk, ActingSecretary of State, Washington D.C.

For your confidential information and prompt attention: Following issubstance of message of January twelfth from Von Schanz of GermanImperial Bank to Trotsky, quote Consent imperial bank to appropriationfrom credit general staff of five million roubles for sending assistantchief naval commissioner Kudrisheff to Far East.

This message suggests some liaison between Trotsky and the Germansin January 1918, a time when Trotsky was proposing an alliance with theWest. The State Department does not give the provenance of the

telegram, only that it originated with the War College Staff. The StateDepartment did treat the message as authentic and acted on the basis of assumed authenticity. It is consistent with the general theme of ColonelMacLean's article.

TROTSKY'S INTENTIONS AND OBJECTIVES

Consequently, we can derive the following sequence of events: Trotsky

traveled from New York to Petrograd on a passport supplied by theintervention of Woodrow Wilson, and with the declared intention to"carry forward" the revolution. The British government was theimmediate source of Trotsky's release from Canadian custody in April1917, but there may well have been "pressures." Lincoln Steffens, anAmerican Communist, acted as a link between Wilson and Charles R.

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Crane and between Crane and Trotsky. Further, while Crane had noofficial position, his son Richard was confidential assistant to Secretaryof State Robert Lansing, and Crane senior was provided with promptand detailed reports on the progress of the Bolshevik Revolution.

Moreover, Ambassador William Dodd (U.S. ambassador to Germany inthe Hitler era) said that Crane had an active role in the Kerensky phaseof the revolution; the Steffens letters confirm that Crane saw theKerensky phase as only one step in a continuing revolution.

The interesting point, however, is not so much the communicationamong dissimilar persons like Crane, Steffens, Trotsky, and WoodrowWilson as the existence of at least a measure of agreement on the

 procedure to be followed — that is, the Provisional Government wasseen as "provisional," and the "re-revolution" was to follow.

On the other side of the coin, interpretation of Trotsky's intentionsshould be cautious: he was adept at double games. Officialdocumentation clearly demonstrates contradictory actions. For example,the Division of Far Eastern Affairs in the U.S. State Departmentreceived on March 23, 1918, two reports stemming from Trotsky; one isinconsistent with the other. One report, dated March 20 and from

Moscow, originated in the Russian newspaper  Russkoe Slovo. The reportcited an interview with Trotsky in which he stated that any alliance withthe United States was impossible:

The Russia of the Soviet cannot align itself... with capitalistic Americafor this would be a betrayal It is possible that Americans seek such anrapprochement with us, driven by its antagonism towards Japan, but inany case there can be no question of an alliance by us of any nature witha bourgeoisie nation.24

The other report, also originating in Moscow, is a message dated March17, 1918, three days earlier, and from Ambassador Francis: "Trotskyrequests five American officers as inspectors of army being organizedfor defense also requests railroad operating men and equipment."25

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This request to the U.S. is of course inconsistent with rejection of an"alliance."

Before we leave Trotsky some mention should be made of the Stalinist

show trials of the 1930s and, in particular, the 1938 accusations and trialof the "Anti-Soviet bloc of rightists and Trotskyites." These forced parodies of the judicial process, almost unanimously rejected in theWest, may throw light on Trotsky's intentions.

The crux of the Stalinist accusation was that Trotskyites were paidagents of international capitalism. K. G. Rakovsky, one of the 1938defendants, said, or was induced to say, "We were the vanguard of foreign aggression, of international fascism, and not only in the USSR  but also in Spain, China, throughout the world." The summation of the"court" contains the statement, "There is not a single man in the worldwho brought so much sorrow and misfortune to people as Trotsky. He isthe vilest agent of fascism .... "26

 Now while this may be no more than verbal insults routinely tradedamong the international Communists of the 1930s and 40s, it is alsonotable that the threads behind the self-accusation are consistent with the

evidence in this chapter. And further, as we shall see later, Trotsky wasable to generate support among international capitalists, who,incidentally, were also supporters of Mussolini and Hitler.27

So long as we see all international revolutionaries and all internationalcapitalists as implacable enemies of one another, then we miss a crucial point — that there has indeed been some operational cooperation between international capitalists, including fascists. And there is no a priori reason why we should reject Trotsky as a part of this alliance.

This tentative, limited reassessment will be brought into sharp focuswhen we review the story o£ Michael Gruzenberg, the chief Bolshevik agent in Scandinavia who under the alias of Alexander Gumberg wasalso a confidential adviser to the Chase National Bank in New York andlater to Floyd Odium of Atlas Corporation. This dual role was known to

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and accepted by both the Soviets and his American employers. TheGruzenberg story is a case history of international revolution allied withinternational capitalism.

Colonel MacLean's observations that Trotsky had "strong undergroundinfluence" and that his "power was so great that orders were issued thathe must be given every consideration" are not at all inconsistent with theCoulter-Gwatkin intervention in Trotsky's behalf; or, for that matter,with those later occurrences, the Stalinist accusations in the Trotskyiteshow trials of the 1930s. Nor are they inconsistent with the Gruzenbergcase. On the other hand, the only known direct link between Trotsky andinternational banking is through his cousin Abram Givatovzo, who was a

 private banker in Kiev before the Russian Revolution and in Stockholmafter the revolution. While Givatovzo professed antibolshevism, he wasin fact acting in behalf of the Soviets in 1918 in currency transactions.28

Is it possible an international web (:an be spun from these events? Firstthere's Trotsky, a Russian internationalist revolutionary with Germanconnections who sparks assistance from two supposed supporters of Prince Lvov's government in Russia (Aleinikoff and Wolf, Russiansresident in New York). These two ignite the action of a liberal Canadian

deputy postmaster general, who in turn intercedes with a prominentBritish Army major general on the Canadian military staff. These are allverifiable links.

In brief, allegiances may not always be what they are called, or appear.We can, however, surmise that Trotsky, Aleinikoff, Wolf, Coulter, andGwatkin in acting for a common limited objective also had somecommon higher goal than national allegiance or political label. Toemphasize, there is no absolute proof that this is so. It is, at the moment,only a logical supposition from the facts. A loyalty higher than thatforged by a common immediate goal need have been no more than thatof friendship, although that strains the imagination when we ponder sucha polyglot combination. It may also have been promoted by other motives. The picture is yet incomplete.

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Footnotes:

1

Leon Trotsky, My Life (New York: Scribner's, 1930), chap. 22.2Joseph Nedava, Trotsky and the Jews (Philadelphia: Jewish PublicationSociety of America, 1972), p. 163.

3United States, Senate, Brewing and Liquor Interests and German and 

 Bolshevik Propaganda (Subcommittee on the Judiciary), 65th Cong.,1919.

4

Special Report No. 5, The Russian Soviet Bureau in the United States,July 14, 1919, Scotland House, London S.W.I. Copy in U.S. State Dept.Decimal File, 316-23-1145.

5 New York Times, March 5, 1917.

6Lewis Corey, House of Morgan: A Social Biography of the Masters of 

Money (New York: G. W. Watt, 1930).

7

Morris Hillquit. (formerly Hillkowitz) had been defense attorney for Johann Most, alter the assassination of President McKinley, and in 1917was a leader of the New York Socialist Party. In the 1920s Hillquitestablished himself in the New York banking world by becoming adirector of, and attorney for, the International Union Bank. Under President Franklin D. Roosevelt, Hillquit helped draw up the NRA codesfor the garment industry.

8 New York Times, March 16, 1917.

9U.S. State Dept. Decimal File, 316-85-1002.

10Ibid.

11Ibid., 861.111/315.

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12Lincoln Steffens, Autobiography (New York: Harcourt, Brace, 1931), p. 764. Steffens was the "go-between" for Crane and Woodrow Wilson.

13William Edward Dodd, Ambassador Dodd's Diary, 1933-1938 (New

York: Harcourt, Brace, 1941), pp. 42-43.14Lincoln Steffens, The Letters of Lincoln Steffens (New York: Harcourt,Brace, 1941), p. 396.

15U.S. State Dept. Decimal File, 861.00/1026.

16This section is based on Canadian government records.

17

Gwatkin's memoramada in the Canadian government files are notsigned, but initialed with a cryptic mark or symbol. The mark has beenidentified as Gwatkin's because one Gwatkin letter (that o[ April 21)with that cryptic mark was acknowledged.

18H.J. Morgan, Canadian Men and Women of the Times, 1912, 2 vols.(Toronto: W. Briggs, 1898-1912).

19June 1919, pp. 66a-666. Toronto Public Library has a copy; the issue

of MacLean's in which Colonel MacLean's article appeared is not easyto find and a frill summary is provided below.

20See also Trotsky, My Life, p. 236.

21See Appendix 3.

22According to his own account, Trotsky did not arrive in the U.S. untilJanuary 1917. Trotsky's real name was Bronstein; he invented the name

"Trotsky." "Bronstein" is German and "Trotsky" is Polish rather thanRussian. His first name is usually given as "Leon"; however, Trotsky'sfirst book, which was published in Geneva, has the initial "N," not "L."

23See Appendix 3; this document was obtained in 1971 from the BritishForeign Office but apparently was known to MacLean.

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24U.S. State Dept. Decimal File, 861.00/1351.

25U.S. State Dept. Decimal File, 861.00/1341.

26

 Report of Court Proceedings in the Case of the Anti-Soviet "Bloc of  Rightists and Trotskyites" Heard Before the Military Collegium of the

Supreme Court of the USSR (Moscow: People's Commissariat of Justiceof the USSR, 1938), p. 293.

27See p. 174. Thomas Lamont of the Morgans was an early supporter of Mussolini.

28See p. 122.

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Chapter III

LENIN AND GERMAN ASSISTANCE FOR THE BOLSHEVIK REVOLUTION

It was not until the Bolsheviks had received from us a steady flow of 

funds through various channels and under varying labels that they

were in a position to be able to build up their main organ Pravda, to

conduct energetic propaganda and appreciably to extend theoriginally narrow base of their party. 

Von Kühlmann, minister of foreign affairs, to the kaiser  , December 3,

1917 

In April 1917 Lenin and a party of 32 Russian revolutionaries, mostlyBolsheviks, journeyed by train from Switzerland across Germany

through Sweden to Petrograd, Russia. They were on their way to joinLeon Trotsky to "complete the revolution." Their trans-Germany transitwas approved, facilitated, and financed by the German General Staff.Lenin's transit to Russia was part of a plan approved by the GermanSupreme Command, apparently not immediately known to the kaiser, toaid in the disintegration of the Russian army and so eliminate Russiafrom World War I. The possibility that the Bolsheviks might be turnedagainst Germany and Europe did not occur to the German General Staff.

Major General Hoffman has written, "We neither knew nor foresaw thedanger to humanity from the consequences of this journey of theBolsheviks to Russia."1

At the highest level the German political officer who approved Lenin's journey to Russia was Chancellor Theobald von Bethmann-Hollweg, a

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descendant of the Frankfurt banking family Bethmann, which achievedgreat prosperity in the nineteenth century. Bethmann-Hollweg wasappointed chancellor in 1909 and in November 1913 became the subjectof the first vote of censure ever passed by the German Reichstag on a

chancellor. It was Bethmann-Hollweg who in 1914 told the world thatthe German guarantee to Belgium was a mere "scrap of paper." Yet onother war matters — such as the use of unrestricted submarinewarfare — Bethmann-Hollweg was ambivalent; in January 1917 he toldthe kaiser, "I can give Your Majesty neither my assent to the unrestrictedsubmarine warfare nor my refusal." By 1917 Bethmann-Hollweg hadlost the Reichstag's support and resigned — but not before approvingtransit of Bolshevik revolutionaries to Russia. The transit instructions

from Bethmann-Hollweg went through the state secretary Arthur Zimmermann — who was immediately under Bethmann-Hollweg andwho handled day-to-day operational details with the German ministers in both Bern and Copenhagen — to the German minister to Bern in earlyApril 1917. The kaiser himself was not aware of the revolutionarymovement until after Lenin had passed into Russia.

While Lenin himself did not know the precise source of the assistance,he certainly knew that the German government was providing some

funding. There were, however, intermediate links between the Germanforeign ministry and Lenin, as the following shows:

LENIN'S TRANSFER TO RUSSIA INAPRIL 1917

Final decision BETHMANN-HOLLWEG(Chancellor)

Intermediary I ARTHUR  ZIMMERMANN(State Secretary)

Intermediary II BROCKDORFF-RANTZAU(German Minister in

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Copenhagen)Intermediary III ALEXANDER  

ISRAELHELPHAND

(alias PARVUS)Intermediary IV JACOB

FURSTENBERG(alias GANETSKY)LENIN, inSwitzerland

From Berlin Zimmermann and Bethmann-Hollweg communicated with

the German minister in Copenhagen, Brockdorff-Rantzau. In turn,Brockdorff-Rantzau was in touch with Alexander Israel Helphand (morecommonly known by his alias, Parvus), who was located inCopenhagen.2 Parvus was the connection to Jacob Furstenberg, a Poledescended from a wealthy family but better known by his alias,Ganetsky. And Jacob Furstenberg was the immediate link to Lenin.

Although Chancellor Bethmann-Hollweg was the final authority for Lenin's transfer, and although Lenin was probably aware of the German

origins of the assistance, Lenin cannot be termed a German agent. TheGerman Foreign Ministry assessed Lenin's probable actions in Russia as being consistent with their own objectives in the dissolution of theexisting power structure in Russia. Yet both parties also had hiddenobjectives: Germany wanted priority access to the postwar markets inRussia, and Lenin intended to establish a Marxist dictatorship.

The idea of using Russian revolutionaries in this way can be traced back 

to 1915. On August 14 of that year, Brockdorff-Rantzau wrote theGerman state undersecretary about a conversation with Helphand(Parvus), and made a strong recommendation to employ Helphand, "an

extraordinarily important man whose unusual powers I feel we must 

employ for duration of the war .... "3 Included in the report was awarning: "It might perhaps be risky to want to use the powers ranged

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 behind Helphand, but it would certainly be an admission of our ownweakness if we were to refuse their services out of fear of not being ableto direct them."4

Brockdorff-Rantzau's ideas of directing or controlling the revolutionaries parallel, as we shall see, those of the Wall Street financiers. It was J.P.Morgan and the American International Corporation that attempted tocontrol both domestic and foreign revolutionaries in the United Statesfor their own purposes.

A subsequent document5 outlined the terms demanded by Lenin, of which the most interesting was point number seven, which allowed"Russian troops to move into India"; this suggested that Lenin intendedto continue the tsarist expansionist program. Zeman also records the roleof Max Warburg in establishing a Russian publishing house and advertsto an agreement dated August 12, 1916, in which the Germanindustrialist Stinnes agreed to contribute two million rubles for financinga publishing house in Russia.6

Consequently, on April 16, 1917, a trainload of thirty-two, includingLenin, his wife Nadezhda Krupskaya, Grigori Zinoviev, Sokolnikov, and

Karl Radek, left the Central Station in Bern en route to Stockholm.When the party reached the Russian frontier only Fritz Plattan andRadek were denied entrance into Russia. The remainder of the party wasallowed to enter. Several months later they were followed by almost 200Mensheviks, including Martov and Axelrod.

It is worth noting that Trotsky, at that time in New York, also had fundstraceable to German sources. Further, Von Kuhlmann alludes to Lenin'sinability to broaden the base of his Bolshevik party until the Germans

supplied funds. Trotsky was a Menshevik who turned Bolshevik only in1917. This suggests that German funds were perhaps related to Trotsky'schange of party label.

THE SISSON DOCUMENTS

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In early 1918 Edgar Sisson, the Petrograd representative of the U.S.Committee on Public Information, bought a batch of Russian documents purporting to prove that Trotsky, Lenin, and the other Bolshevik revolutionaries were not only in the pay of, but also agents of, the

German government.

These documents, later dubbed the "Sisson Documents," were shipped tothe United States in great haste and secrecy. In Washington, D.C. theywere submitted to the National Board for Historical Service for authentication. Two prominent historians, J. Franklin Jameson andSamuel N. Harper, testified to their genuineness. These historiansdivided the Sisson papers into three groups. Regarding Group I, they

concluded:We have subjected them with great care to all the applicable tests towhich historical students are accustomed and . . . upon the basis of theseinvestigations, we have no hesitation in declaring that we see no reasonto doubt the genuineness or authenticity of these fifty-three documents.7

The historians were less confident about material in Group II. Thisgroup was not rejected as. outright forgeries, but it was suggested that

they were copies of original documents. Although the historians made"no confident declaration" on Group III, they were not prepared to rejectthe documents as outright forgeries.

The Sisson Documents were published by the Committee on PublicInformation, whose chairman was George Creel, a former contributor tothe pro-Bolshevik Masses. The American press in general accepted thedocuments as authentic. The notable exception was the New York 

 Evening Post, at that time owned by Thomas W. Lamont, a partner in

the Morgan firm. When only a few installments had been published, the Post challenged the authenticity of all the documents.8

We now know that the Sisson Documents were almost all forgeries: onlyone or two of the minor German circulars were genuine. Even casualexamination of the German letterhead suggests that the forgers were

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unusually careless forgers perhaps working for the gullible Americanmarket. The German text was strewn with terms verging on theridiculous: for example, Bureau instead of the German word Büro;

Central for the German Zentral; etc.

That the documents are forgeries is the conclusion of an exhaustivestudy by George Kennan9 and of studies made in the 1920s by theBritish government. Some documents were based on authenticinformation and, as Kennan observes, those who forged them certainlyhad access to some unusually good information. For example,Documents 1, 54, 61, and 67 mention that the Nya Banken in Stockholmserved as the conduit for Bolshevik funds from Germany. This conduit

has been confirmed in more reliable sources. Documents 54, 63, and 64mention Furstenberg as the banker-intermediary between the Germansand the Bolshevists; Furstenberg's name appears elsewhere in authenticdocuments. Sisson's Document 54 mentions Olof Aschberg, and Olof Aschberg by his own statements was the "Bolshevik Banker." Aschbergin 1917 was the director of Nya Banken. Other documents in the Sissonseries list names and institutions, such as the German Naptha-IndustrialBank, the Disconto Gesellschaft, and Max Warburg, the Hamburg banker, but hard supportive evidence is more elusive. In general, the

Sisson Documents, while themselves outright forgeries, are nonetheless based partly on generally authentic information.

One puzzling aspect in the light of the story in this book is that thedocuments came to Edgar Sisson from Alexander Gumberg (alias Berg,real name Michael Gruzenberg), the Bolshevik agent in Scandinavia andlater a confidential assistant to Chase National Bank and Floyd Odiumof Atlas Corporation. The Bolshevists, on the other hand, stridently

repudiated the Sisson material. So did John Reed, the Americanrepresentative on the executive of the Third International and whose paycheck came from Metropolitan magazine, which was owned by J.P.Morgan interests.10 So did Thomas Lamont, the Morgan partner whoowned the New York Evening Post. There are several possibleexplanations. Probably the connections between the Morgan interests in

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 New York and such agents as John Reed and Alexander Gumberg werehighly flexible. This could have been a Gumberg maneuver to discreditSisson and Creel by planting forged documents; or perhaps Gumbergwas working in his own interest.

The Sisson Documents "prove" exclusive German involvement with theBolsheviks. They also have been used to "prove" a Jewish-Bolshevik conspiracy theory along the lines of that of the Protocols of Zion. In1918 the U.S. government wanted to unite American opinion behind anunpopular war with Germany, and the Sisson Documents dramatically"proved" the exclusive complicity of Germany with the Bolshevists. Thedocuments also provided a smoke screen against public knowledge of 

the events to be described in this book.

THE TUG-OF-WAR IN WASHINGTON11 

A review of documents in the State Department Decimal File suggeststhat the State Department and Ambassador Francis in Petrograd werequite well informed about the intentions and progress of the Bolshevik movement. In the summer of 1917, for example, the State Department

wanted to stop the departure from the U.S. of "injurious persons" (thatis, returning Russian revolutionaries) but was unable to do so becausethey were using new Russian and American passports. The preparationsfor the Bolshevik Revolution itself were well known at least six weeks before it came about. One report in the State Department files states, inregard to the Kerensky forces, that it was "doubtful whether government . . . [can] suppress outbreak." Disintegration of theKerensky government was reported throughout September and October as were Bolshevik preparations for a coup. The British governmentwarned British residents in Russia to leave at least six weeks before theBolshevik phase of the revolution.

The first full report of the events of early November reachedWashington on December 9, 1917. This report described the low-keynature of the revolution itself, mentioned that General William V.

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Judson had made an unauthorized visit to Trotsky, and pointed out the presence of Germans in Smolny — the Soviet headquarters.

On November 28, 1917, President Woodrow Wilson ordered no

interference with the Bolshevik Revolution. This instruction wasapparently in response to a request by Ambassador Francis for an Alliedconference, to which Britain had already agreed. The State Departmentargued that such a conference was impractical. There were discussionsin Paris between the Allies and Colonel Edward M. House, who reportedthese to Woodrow Wilson as "long and frequent discussions on Russia."Regarding such a conference, House stated that England was "passivelywilling," France "indifferently against," and Italy "actively so."

Woodrow Wilson, shortly thereafter, approved a cable authored bySecretary of State Robert Lansing, which provided financial assistancefor the Kaledin movement (December 12, 1917). There were alsorumors filtering into Washington that "monarchists working with theBolsheviks and same supported by various occurrences andcircumstances"; that the Smolny government was absolutely under control of the German General Staff; and rumors elsewhere that "manyor most of them [that is, Bolshevists] are from America."

In December, General Judson again visited Trotsky; this was lookedupon as a step towards recognition by the U.S., although a report datedFebruary 5, 1918, from Ambassador Francis to Washington,recommended against recognition. A memorandum originating withBasil Miles in Washington argued that "we should deal with allauthorities in Russia including Bolsheviks." And on February 15, 1918,the State Department cabled Ambassador Francis in Petrograd, statingthat the "department desires you gradually to keep in somewhat closer 

and informal touch with the Bolshevik authorities using such channels aswill avoid any official recognition."

The next day Secretary of State Lansing conveyed the following to theFrench ambassador J. J. Jusserand in Washington: "It is consideredinadvisable to take any action which will antagonize at this time any of 

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the various elements of the people which now control the power inRussia .... "12

On February 20, Ambassador Francis cabled Washington to report the

approaching end of the Bolshevik government. Two weeks later, onMarch 7, 1918, Arthur Bullard reported to Colonel House that Germanmoney was subsidizing the Bolsheviks and that this subsidy was moresubstantial than previously thought. Arthur Bullard (of the U.S.Committee on Public Information) argued: "we ought to be ready to helpany honest national government. But men or money or equipment sent tothe present rulers of Russia will be used against Russians at least asmuch as against Germans."13

This was followed by another message from Bullard to Colonel House:"I strongly advise against giving material help to the present Russiangovernment. Sinister elements in Soviets seem to be gaining control."

But there were influential counterforces at work. As early as November 28, 1917, Colonel House cabled President Woodrow Wilson from Paristhat it was "exceedingly important" that U.S. newspaper commentsadvocating that "Russia should be treated as an enemy" be "suppressed."

Then next month William Franklin Sands, executive secretary of theMorgan-controlled American International Corporation and a friend of the previously mentioned Basil Miles, submitted a memorandum thatdescribed Lenin and Trotsky as appealing to the masses and that urgedthe U.S. to recognize Russia. Even American socialist Wallingcomplained to the Department of State about the pro-Soviet attitude of George Creel (of the U.S. Committee on Public Information), HerbertSwope, and William Boyce Thompson (of the Federal Reserve Bank of  New York).

On December 17, 1917, there appeared in a Moscow newspaper anattack on Red Cross colonel Raymond Robins and Thompson, alleging alink between the Russian Revolution and American bankers:

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Why are they so interested in enlightenment? Why was the money giventhe socialist revolutionaries and not to the constitutional democrats? Onewould suppose the latter nearer and dearer to hearts of bankers.

The article goes on to argue that this was because American capitalviewed Russia as a future market and thus wanted to get a firm foothold.The money was given to the revolutionaries because

the backward working men and peasants trust the social revolutionaries.At the time when the money was passed the social revolutionaries werein power and it was supposed they would remain in control in Russia for some time.

Another report, dated December 12, 1917, and relating to RaymondRobins, details "negotiation with a group of American bankers of theAmerican Red Cross Mission"; the "negotiation" related to a payment of two million dollars. On January 22, 1918, Robert L Owen, chairman of the U.S. Senate Committee on Banking and Currency and linked to WallStreet interests, sent a letter to Woodrow Wilson recommending de factorecognition of Russia, permission for a shipload of goods urgentlyneeded in Russia, the appointment of representatives to Russia to offset

German influence, and the establishment of a career-service group inRussia.

This approach was consistently aided by Raymond Robins in Russia. For example, on February 15, 1918, a cable from Robins in Petrograd toDavison in the Red Cross in Washington (and to be forwarded toWilliam Boyce Thompson) argued that support be given to theBolshevik authority for as long as possible, and that the newrevolutionary Russia will turn to the United States as it has "broken with

the German imperialism." According to Robins, the Bolsheviks wantedUnited States assistance and cooperation together with railroadreorganization, because "by generous assistance and technical advice inreorganizing commerce and industry America may entirely excludeGerman commerce during balance of war."

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In brief, the tug-of-war in Washington reflected a struggle between, onone side, old-line diplomats (such as Ambassador Francis) and lower-level departmental officials, and, on the other, financiers like Robins,Thompson, and Sands with allies such as Lansing and Miles in the State

Department and Senator Owen in the Congress.

Footnotes:

1Max Hoffman, War Diaries and Other Papers (London: M. Secker,1929), 2:177.

2

Z. A. B. Zeman and W. B. Scharlau, The Merchant of Revolution.. The Life of A1exander Israel Helphand (Parvus), 1867-1924 (New York:Oxford University Press, 1965).

3Z. A. B. Zeman, Germany and the Revolution in Russia, 1915-1918.

 Documents from the Archives of the German Foreign Ministry (London:Oxford University Press, 1958), p. ????5.

4Ibid.

5Ibid., p. 6, doc. 6, reporting a conversation with the Fstonianintermediary Keskula.

6Ibid., p. 92, n. 3.

7U.S., Committee on Public Information, The German-Bolshevik 

Conspiracy, War Information Series, no. 20, October 1918.

8

 New York Evening Post, September 16-18, 21; October 4, 1918. It isalso interesting, but not conclusive of anything, that the Bolsheviks alsostoutly questioned the authenticity of the documents.

9George F. Kennan, "The Sisson Documents," Journal of Modern

 History 27-28 (1955-56): 130-154.

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10John Reed, The Sisson Documents (New York: Liberator Publishing,n.d.).

11This part is based on section 861.00 o[ the U.S. State Dept. Decimal

File, also available as National Archives rolls 10 and 11 of microcopy316.

12U.S. State Dept. Decimal File, 861.00/1117a. The same message wasconveyed to the Italian ambassador.

13See Arthur Bullard papers at Princeton University.

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Chapter IV

WALL STREET AND WORLD REVOLUTION

What you Radicals and we who hold opposing views differ about, is

not so much the end as the means, not so much what should be

brought about as how it should, and can, be brought about .... 

Otto H. Kahn, director, American International Corp., and partner,

 Kuhn, Loeb & Co., speaking to the League/or Industrial Democracy,

 New York, December 30, 1924

Before World War I, the financial and business structure of the UnitedStates was dominated by two conglomerates: Standard Oil, or theRockefeller enterprise, and the Morgan complex of industries — financeand transportation companies. Rockefeller and Morgan trust alliances

dominated not only Wall Street but, through interlocking directorships,almost the entire economic fabric of the United States.l Rockefeller interests monopolized the petroleum and allied industries, and controlledthe copper trust, the smelters trust, and the gigantic tobacco trust, inaddition to having influence in some Morgan properties such as the U.S.Steel Corporation as well as in hundreds of smaller industrial trusts, public service operations, railroads, and banking institutions. NationalCity Bank was the largest of the banks influenced by Standard Oil-Rockefeller, but financial control extended to the United States TrustCompany and Hanover National Bank as well as to major life insurance companies — Equitable Life and Mutual of New York.

The great Morgan enterprises were in steel, shipping, and the electricalindustry; they included General Electric, the rubber trust, and railroads.Like Rockefeller, Morgan controlled financial corporations — the

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 National Bank of Commerce and the Chase National Bank, New York Life Insurance, and the Guaranty Trust Company. The names J.P.Morgan and Guaranty Trust Company occur repeatedly throughout this book. In the early part of the twentieth century the Guaranty Trust

Company was dominated by the Harriman interests. When the elder Harriman (Edward Henry) died in 1909, Morgan and associates boughtinto Guaranty Trust as well as into Mutual Life and New York Life. In1919 Morgan also bought control of Equitable Life, and the GuarantyTrust Company absorbed an additional six lesser trust companies.Therefore, at the end of World War I the Guaranty Trust and BankersTrust were, respectively, the first and second largest trust companies inthe United States, both dominated by Morgan interests.2 

American financiers associated with these groups were involved infinancing revolution even before 1917. Intervention by the Wall Streetlaw firm of Sullivan & Cromwell into the Panama Canal controversy isrecorded in 1913 congressional hearings. The episode is summarized byCongressman Rainey:

It is my contention that the representatives of this Government [UnitedStates] made possible the revolution on the isthmus of Panama. That had

it not been for the interference of this Government a successfulrevolution could not possibly have occurred, and I contend that thisGovernment violated the treaty of 1846. I will be able to produceevidence to show that the declaration of independence which was promulgated in Panama on the 3rd day of November, 1903, was prepared right here in New York City and carried down there —  prepared in the office of Wilson (sic) Nelson Cromwell ....3 

Congressman Rainey went on to state that only ten or twelve of the topPanamanian revolutionists plus "the officers of the Panama Railroad &Steamship Co., who were under the control of William NelsonCromwell, of New York and the State Department officials inWashington," knew about the impending revolution.4 The purpose of the

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revolution was to deprive Colombia, of which Panama was then a part,of $40 million and to acquire control of the Panama Canal.

The best-documented example of Wall Street intervention in revolution

is the operation of a New York syndicate in the Chinese revolution of 1912, which was led by Sun Yat-sen. Although the final gains of thesyndicate remain unclear, the intention and role of the New York financing group are fully documented down to amounts of money,information on affiliated Chinese secret societies, and shipping lists of armaments to be purchased. The New York bankers syndicate for theSun Yat-sen revolution included Charles B. Hill, an attorney with thelaw firm of Hunt, Hill & Betts. In 1912 the firm was located at 165

Broadway, New York, but in 1917 it moved to 120 Broadway (seechapter eight for the significance of this address). Charles B. Hill wasdirector of several Westinghouse subsidiaries, including Bryant Electric,Perkins Electric Switch, and Westinghouse Lamp — all affiliated withWestinghouse Electric whose New York office was also located at 120Broadway. Charles R. Crane, organizer of Westinghouse subsidiaries inRussia, had a known role in the first and second phases of the Bolshevik Revolution (see page 26).

The work of the 1910 Hill syndicate in China is recorded in theLaurence Boothe Papers at the Hoover Institution.5 These papers containover 110 related items, including letters of Sun Yat-sen to and from hisAmerican backers. In return for financial support, Sun Yat-sen promisedthe Hill syndicate railroad, banking, and commercial concessions in thenew revolutionary China.

Another case of revolution supported by New York financial institutionsconcerned that of Mexico in 1915-16. Von Rintelen, a Germanespionage agent in the United States,6 was accused during his May 1917trial in New York City of attempting to "embroil" the U.S. with Mexicoand Japan in order to divert ammunition then flowing to the Allies inEurope.7 Payment for the ammunition that was shipped from the UnitedStates to the Mexican revolutionary Pancho Villa, was made through

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Guaranty Trust Company. Von Rintelen's adviser, Sommerfeld, paid$380,000 via Guaranty Trust and Mississippi Valley Trust Company tothe Western Cartridge Company of Alton, Illinois, for ammunitionshipped to El Paso, for forwarding to Villa. This was in mid-1915. On

January 10, 1916, Villa murdered seventeen American miners at SantaIsabel and on March 9, 1916, Villa raided Columbus, New Mexico, andkilled eighteen more Americans.

Wall Street involvement in these Mexican border raids was the subjectof a letter (October 6, 1916) from Lincoln Steffens, an AmericanCommunist, to Colonel House, an aide' to Woodrow Wilson:

My dear Colonel House:

Just before I left New York last Monday, I was told convincingly that"Wall Street" had completed arrangements for one more raid of Mexican bandits into the United States: to be so timed and so atrocious that itwould settle the election ....8 

Once in power in Mexico, the Carranza government purchasedadditional arms in the United States. The American Gun Company

contracted to ship 5,000 Mausers and a shipment license was issued bythe War Trade Board for 15,000 guns and 15,000,000 rounds of ammunition. The American ambassador to Mexico, Fletcher, "flatlyrefused to recommend or sanction the shipment of any munitions, rifles,etc., to Carranza."9 However, intervention by Secretary of State RobertLansing reduced the barrier to one of a temporary delay, and "in a shortwhile . . . [the American Gun Company] would be permitted to make theshipment and deliver."10 

The raids upon the U.S. by the Villa and the Carranza forces werereported in the New York Times as the "Texas Revolution" (a kind of dryrun for the Bolshevik Revolution) and were undertaken jointly byGermans and Bolsheviks. The testimony of John A. Walls, districtattorney of Brownsville, Texas, before the 1919 Fall Committee yieldeddocumentary evidence of the link between Bolshevik interests in the

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firms that they were contrary to international law. Further, negotiationsfor the loans were undertaken through official U.S. governmentcommunications facilities under cover of the top-level "Green Cipher" of the State Department. Below are extracts from State Department cables

that will make the case.

On May 94, 1916, Ambassador Francis in Petrograd sent the followingcable to the State Department in Washington for forwardin to Frank Arthur Vanderlip, then chairman of the National City Bank in NewYork. The cable was sent in Green Cipher and was enciphered anddeciphered by U.S. State Department officers in Petrograd andWashington at the taxpayers' expense (file 861.51/110).

563, May 94, 1 p.m.

For Vanderlip National City Bank New York. Five. Our previousopinions credit strengthened. We endorse plan cabled as safe investment plus very attractive speculation in roubles. In view of guarantee of exchange rate have placed rate somewhat above present market. Owingunfavorable opinion created by long delay have on own responsibilityoffered take twenty-five million dollars. We think large portion of all

should be retained by bank and allied institutions. With clause respectcustoms bonds become practical lien on more than one hundred and fiftymillion dollars per annum customs making absolute security and securesmarket even if defect. We consider three [years?] option on bonds veryvaluable and for that reason amount of rouble credit should be enlarged by group or by distribution to close friends. American Internationalshould take block and we would inform Government. Think groupshould be formed at once to take and issue of bonds . . . should securefull cooperation guaranty. Suggest you see Jack personally, use everyendeavor to get them really work otherwise cooperate guarantee formnew group. Opportunities here during the next ten years very great alongstate and industrial financiering and if this transaction consummateddoubtless should be established. In answering bear in mind situation

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regarding cable.MacRoberts Rich.

FRANCIS, AMERICAN AMBASSADOR 14 

There are several points to note about the above cable to understand thestory that follows. First, note the reference to American InternationalCorporation, a Morgan firm, and a name that turns up again and again inthis story. Second, "guarantee" refers to Guaranty Trust Company.Third, "MacRoberts" was Samuel MacRoberts, a vice president and theexecutive manager of National City Bank.

On May 24 , 1916, Ambassador Francis cabled a message from RolphMarsh of Guaranty Trust in Petrograd to Guaranty Trust in New York,again in the special Green Cipher and again using the facilities of theState Department. This cable reads as follows:

565, May 24, 6 p.m.for Guaranty Trust Company New York:Three.

Olof and self consider the new proposition takes care Olof and will helprather than harm your prestige. Situation such co-operation necessary if  big things are to be accomplished here. Strongly urge your arrangingwith City to consider and act jointly in all big propositions here. Decidedadvantages for both and prevents playing one against other. Cityrepresentatives here desire (hand written) such co-operation. Proposition being considered eliminates our credit in name also option but we bothconsider the rouble credit with the bond option in propositions. Second

 paragraph offers wonderful profitable opportunity, strongly urge your acceptance. Please cable me full authority to act in connection with City.Consider our entertaining proposition satisfactory situation for us and permits doing big things. Again strongly urge your taking twenty-fivemillion of rouble credit. No possibility loss and decided speculativeadvantages. Again urge having Vice President upon the ground. Effect

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here will be decidedly good. Resident Attorney does not carry same prestige and weight. This goes through Embassy by code answer sameway. See cable on possibilities.

ROLPH MARSH.FRANCIS,

AMERICAN AMBASSADOR 

 Note:— 

Entire Message in Green Cipher.TELEGRAPH ROOM15 

"Olof" in the cable was Olof Aschberg, Swedish banker and head of the Nya Banken in Stockholm. Aschberg had been in New York in 1915conferring with the Morgan firm on these Russian loans. Now, in 1916,he was in Petrograd with Rolph Marsh of Guaranty Trust and SamuelMacRoberts and Rich of National City Bank ("City" in cable) arrangingloans for a Morgan-Rockefeller consortium. The following year,Aschberg, as we shall see later, would be known as the "Bolshevik 

Banker," and his own memoirs reproduce evidence of his right to thetitle.

The State Department files also contain a series of cables betweenAmbassador Francis, Acting Secretary Frank Polk, and Secretary of State Robert Lansing concerning the legality and propriety of transmitting National City Bank and Guaranty Trust cables at publicexpense. On May 25, 1916, Ambassador Francis cabled Washington asfollows and referred to the two previous cables:

569, May 25, one p.m.

My telegram 563 and 565 May twenty-fourth are sent for localrepresentatives of institutions addressed in the hope of consummatingloan which would largely increase international trade and greatly benefit

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[diplomatic relations?]. Prospect for success promising. Petrogradrepresentatives consider terms submitted very satisfactory but fear suchrepresentations to their institutions would prevent consummation loan if Government here acquainted these proposals.

FRANCIS, AMERICAN AMBASSADOR.16 

The basic reason cited by Francis for facilitating the cables is "the hopeof consummating loan which would largely increase international trade."Transmission of commercial messages using State Department facilitieshad been prohibited, and on June 1, 1916, Polk cabled Francis:

842

In view of Department's regulation contained in its circular telegraphicinstruction of March fifteenth, (discontinuance of forwardingCommercial messages)17 1915, please explain why messages in your 563, 565 and 575, should be communicated.

Hereafter please follow closely Department's instructions.

Acting.Polk 

861.51/112/110

Then on June 8, 1916, Secretary of State Lansing expanded the prohibition and clearly stated that the proposed loans were illegal:

860 Your 563, 565, May 24, g: 569 May 25.1 pm Before deliveringmessages to Vanderlip and Guaranty Trust Company, I must inquirewhether they refer to Russian Government loans of any description. If they do, I regret that the Department can not be a party to their transmission, as such action would submit it to justifiable criticism

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 because of participation by this Government in loan transaction by a belligerent for the purpose of carrying on its hostile operations. Such participation is contrary to the accepted rule of international law thatneutral Governments should not lend their assistance to the raising of 

war loans by belligerents.

The last line of the Lansing cable as written, was not transmitted toPetrograd. The line read: "Cannot arrangements be made to send thesemessages through Russian channels?"

How can we assess these cables and the parties involved?

Clearly the Morgan-Rockefeller interests were not interested in abiding

 by international law. There is obvious intent in these cables to supplyloans to belligerents. There was no hesitation on the part of these firmsto use State Department facilities for the negotiations. Further, in spite of  protests, the State Department allowed the messages to go through.Finally, and most interesting for subsequent events, Olof Aschberg, theSwedish banker, was a prominent participant and intermediary in thenegotiations on behalf of Guaranty Trust. Let us therefore take a closer look at Olof Aschberg.

OLOF ASCHBERG IN NEW YORK, 1916 

Olof Aschberg, the "Bolshevik Banker" (or "Bankier der Weltrevolution," as he has been called in the German press), was owner of the Nya Banken, founded 1912 in Stockholm. His codirectorsincluded prominent members of Swedish cooperatives and Swedishsocialists, including G. W. Dahl, K. G. Rosling, and C. Gerhard

Magnusson.18 In 1918 Nya Banken was placed on the Allied black-listfor its financial operations in behalf of Germany. In response to the blacklisting, Nya Banken changed its name to Svensk Ekonomiebolaget.The bank remained under the control of Aschberg, and was mainlyowned by him. The bank's London agent was the British Bank of NorthCommerce, whose chairman was Earl Grey, former associate of Cecil

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Rhodes. Others in Aschberg's interesting circle of business associatesincluded Krassin, who was until the Bolshevik Revolution (when hechanged color to emerge as a leading Bolshevik) Russian manager of Siemens-Schukert in Petrograd; Carl Furstenberg, minister of finance in

the first Bolshevik government; and Max May, vice president in chargeof foreign operations for Guaranty Trust of New York. Olof Aschbergthought so highly of Max May that a photograph of May is included inAschberg's book.19 

In the summer of 1916 Olof Aschberg was in New York representing both Nya Banken and Pierre Bark, the tsarist minister of finance.Aschberg's prime business in New York, according to the New York 

Times (August 4, 1916), was to negotiate a $50 million loan for Russiawith an American banking syndicate headed by Stillman's National CityBank. This business was concluded on June 5, 1916; the results were aRussian credit of $50 million in New York at a bank charge of 7 1/2 percent per annum, and a corresponding 150-million-ruble credit for the NCB syndicate in Russia. The New York syndicate then turned aroundand issued 6 1/2 percent certificates in its own name in the U.S. marketto the amount of $50 million. Thus, the NCB syndicate made a profit onthe $50 million loan to Russia, floated it on the American market for 

another profit, and obtained a 150-million-ruble credit in Russia.

During his New York visit on behalf of the tsarist Russian government,Aschberg made some prophetic comments concerning the future for America in Russia:

The opening for American capital and American initiative, with theawakening brought by the war, will be country-wide when the struggleis over. There are now many Americans in Petrograd, representatives of  business firms, keeping in touch with the situation, and as soon as thechange comes a huge American trade with Russia should spring up.20 

OLOF ASCHBERG IN THE BOLSHEVIK REVOLUTION

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While this tsarist loan operation was being floated in New York, NyaBanken and Olof Aschberg were funneling funds from the Germangovernment to Russian revolutionaries, who would eventually bringdown the "Kerensky committee" and establish the Bolshevik regime.

The evidence for Olof Aschberg's intimate connection with financing theBolshevik Revolution comes from several sources, some of greater valuethan others. The Nya Banken and Olof Aschberg are prominently citedin the Sisson papers (see chapter three); however, George Kennan hassystematically analyzed these papers and shown them to be forged,although they are probably based in part on authentic material. Other evidence originates with Colonel B. V. Nikitine, in charge of 

counterintelligence in the Kerensky government, and consists of twenty-nine telegrams transmitted from Stockholm to Petrograd, and vice versa,regarding financing of the Bolsheviks. Three of these telegrams refer to banks — telegrams 10 and 11 refer to Nya Banken, and telegram 14refers to the Russo-Asiatic Bank in Petrograd. Telegram 10 reads asfollows:

Gisa Furstenberg Saltsjobaden. Funds very low cannot assist if reallyurgent give 500 as last payment pencils huge loss original hopeless

instruct Nya Banken cable further 100 thousand Sumenson.

Telegram 11 reads:

Kozlovsky Sergievskaya 81. First letters received Nya Bankentelegraphed cable who Soloman offering local telegraphic agency refersto Bronck Savelievich Avilov.

Fürstenberg was the intermediary between Parvus (Alexander I.

Helphand) and the German government. About these transfers, MichaelFutrell concludes:

It was discovered that during the last few months she [EvegeniyaSumenson] had received nearly a million rubles from Furstenberg

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through the Nya Banken in Stockholm, and that this money came fromGerman sources.21 

Telegram 14 of the Nikitine series reads: "Furstenberg Saltsjöbaden.

 Number 90 period hundred thousand into Russo-Asiatic Sumenson."The U.S. representative for Russo-Asiatic was MacGregor GrantCompany at 120 Broadway, New York City, and the bank was financed by Guaranty Trust in the U.S. and Nya Banken in Sweden.

Another mention of the Nya Banken is in the material "The ChargesAgainst the Bolsheviks," which was published in the Kerensky period.Particularly noteworthy in that material is a document signed byGregory Alexinsky, a former member of the Second State Duma, inreference to monetary transfers to the Bolsheviks. The document, in part,reads as follows:

In accordance with the information just received these trusted persons inStockholm were: the Bolshevik Jacob Furstenberg, better known under the name of "Hanecki" (Ganetskii), and Parvus (Dr. Helfand); inPetrograd: the Bolshevik attorney, M. U. Kozlovsky, a woman relativeof Hanecki — Sumenson, engaged in speculation together with Hanecki,

and others. Kozlovsky is the chief receiver of German money, which istransferred from Berlin through the "Disconto-Gesellschaft" to theStockholm "Via Bank," and thence to the Siberian Bank in Petrograd,where his account at present has a balance of over 2,000,000 rubles. Themilitary censorship has unearthed an uninterrupted exchange of telegrams of a political and financial nature between the German agentsand Bolshevik leaders [Stockholm-Petrograd].22 

Further, there is in the State Dept. files a Green Cipher message from the

U.S. embassy in Christiania (named Oslo, 1925), Norway, datedFebruary 21, 1918, that reads: "Am informed that Bolshevik funds aredeposited in Nya Banken, Stockholm, Legation Stockholm advised.Schmedeman."23 

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Finally, Michael Furtell, who interviewed Olof Aschberg just before hisdeath, concludes that Bolshevik funds were indeed transferred fromGermany through Nya Banken and Jacob Furstenberg in the guise of  payment for goods shipped. According to Futrell, Aschberg confirmed to

him that Furstenberg had a commercial business with Nya Banken andthat Furstenberg had also sent funds to Petrograd. These statements areauthenticated in Aschberg's memoirs (see page 70). In sum, Aschberg,through his Nya Banken, was undoubtedly a channel for funds used inthe Bolshevik Revolution, and Guaranty Trust was indirectly linkedthrough its association with Aschberg and its interest in MacGregor Grant Co., New York, agent of the Russo-Asiatic Bank, another transfer vehicle.

NYA BANKEN AND GUARANTY TRUST JOIN RUSKOMBANK 

Several years later, in the fall of 1922, the Soviets formed their firstinternational bank. It was based on a syndicate that involved the former Russian private bankers and some new investment from German,Swedish, American, and British bankers. Known as the Ruskombank (Foreign Commercial Bank or the Bank of Foreign Commerce), it was

headed by Olof Aschberg; its board consisted of tsarist private bankers,representatives of German, Swedish, and American banks, and, of course, representatives of the Soviet Union. The U.S. Stockholmlegation reported to Washington on this question and noted, in areference to Aschberg, that "his reputation is poor. He was referred to inDocument 54 of the Sisson documents and Dispatch No. 138 of January4, 1921 from a legation in Copenhagen."24 

The foreign banking consortium involved in the Ruskombank represented mainly British capital. It included Russo-AsiaticConsolidated Limited, which was one of the largest private creditors of Russia, and which was granted £3 million by the Soviets to compensatefor damage to its properties in the Soviet Union by nationalization. TheBritish government itself had already purchased substantial interests in

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the Russian private banks; according to a State Department report, "TheBritish Government is heavily invested in the consortium in question."25 

The consortium was granted extensive concessions in Russia and the

 bank had a share capital of ten million gold rubles. A report in theDanish newspaper  National Titende stated that "possibilities have beencreated for cooperation with the Soviet government where this, by political negotiations, would have been impossible."26 In other words, asthe newspaper goes on to say, the politicians had failed to achievecooperation with the Soviets, but "it may be taken for granted that thecapitalistic exploitation of Russia is beginning to assume more definiteforms."27 

In early October 1922 Olof Aschberg met in Berlin with EmilWittenberg, director of the Nationalbank fur Deutschland, andScheinmann, head of the Russian State Bank. After discussionsconcerning German involvement in the Ruskombank, the three bankerswent to Stockholm and there met with Max May, vice president of theGuaranty Trust Company. Max May was then designated director of theForeign Division of the Ruskombank, in addition to Schlesinger, former head of the Moscow Merchant Bank; Kalaschkin, former head of the

Junker Bank; and Ternoffsky, former head of the Siberian Bank. The last bank had been partly purchased by the British government in 1918.Professor Gustav Cassell of Sweden agreed to act as adviser toRuskombank. Cassell was quoted in a Swedish newspaper (Svenskadagbladet of October 17, 1922) as follows:

That a bank has now been started in Russia to take care of purely banking matters is a great step forward, and it seems to me that this bank was established in order to do something to create a new economic lifein Russia. What Russia needs is a bank to create internal and externalcommerce. If there is to be any business between Russia and other countries there must be a bank to handle it. This step forward should besupported in every way by other countries, and when I was asked myadvice I stated that I was prepared to give it. I am not in favor of a

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negative policy and believe that every opportunity should be seized tohelp in a positive reconstruction. The great question is how to bring theRussian exchange back to normal. It is a complicated question and willnecessitate thorough investigation. To solve this problem I am naturally

more than willing to take part in the work. To leave Russia to her ownresources and her own fate is folly.28 

The former Siberian Bank building in Petrograd was used as the headoffice of the Ruskombank, whose objectives were to raise short-termloans in foreign countries, to introduce foreign capital into the SovietUnion, and generally to facilitate Russian overseas trade. It opened onDecember 1, 1922, in Moscow and employed about 300 persons.

In Sweden Ruskombank was represented by the SvenskaEkonomibolaget of Stockholm, Olof Aschberg's Nya Banken under anew name, and in Germany by the Garantie und Creditbank fur DenOsten of Berlin. In the United States the bank was represented by theGuaranty Trust Company of New York. On opening the bank, Olof Aschberg commented:

The new bank will look after the purchasing of machinery and raw

material from England and the United States and it will give guaranteesfor the completion of contracts. The question of purchases in Swedenhas not yet arisen, but it is hoped that such will be the case later on.29 

On joining Ruskombank, Max May of Guaranty Trust made a similar statement:

The United States, being a rich country with well developed industries,does not need to import anything from foreign countries, but... it is

greatly interested in exporting its products to other countries andconsiders Russia the most suitable market for that purpose, taking intoconsideration the vast requirements of Russia in all lines of its economiclife.30 

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May stated that the Russian Commercial Bank was "very important" andthat it would "largely finance all lines of Russian industries."

From the very beginning the operations of the Ruskombank were

restricted by the Soviet foreign-trade monopoly. The bank haddifficulties in obtaining advances on Russian goods deposited abroad.Because they were transmitted in the name of Soviet trade delegations, agreat deal of Ruskombank funds were locked up in deposits with theRussian State Bank. Finally, in early 1924 the Russian CommercialBank was fused with the Soviet foreign-trade commissariat, and Olof Aschberg was dismissed from his position at the bank because, it wasclaimed in Moscow, he had misused bank funds. His original connection

with the bank was because of his friendship with Maxim Litvinov.Through this association, so runs a State Department report, Olof Aschberg had access to large sums of money for the purpose of meeting payments on goods ordered by Soviets in Europe:

These sums apparently were placed in the Ekonomibolaget, a private banking company, owned by Mr. Aschberg. It is now alledged [ sic] thata large portion of these funds were employed by Mr. Aschberg for making investments for his personal account and that he is now

endeavoring to maintain his position in the bank through his possessionof this money. According to my informant Mr. Aschberg has not beenthe sole one to profit by his operations with the Soviet funds, but hasdivided the gains with those who are responsible for his appointment inthe Russian Commerce Bank, among them being Litvinoff.31 

Ruskombank then became Vneshtorg, by which it is known today.

We now have to retrace our steps and look at the activities of Aschberg's

 New York associate, Guaranty Trust Company, during World War I, tolay the foundation for examination of its role in the revolutionary era inRussia.

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GUARANTY TRUST AND GERMAN ESPIONAGE IN THE

UNITED STATES, 1914-191732 

During World War I Germany raised considerable funds in New York for espionage and covert operations in North America and SouthAmerica. It is important to record the flow of these funds because it runsfrom the same firms — Guaranty Trust and American InternationalCorporation — that were involved in the Bolshevik Revolution and itsaftermath. Not to mention the fact (outlined in chapter three) that theGerman government also financed Lenin's revolutionary activities.

A summary of the loans granted by American banks to German interestsin World War I was given to the 1919 Overman Committee of theUnited States Senate by U.S. Military Intelligence. The summary was based on the deposition of Karl Heynen, who came to the United Statesin April 1915 to assist Dr. Albert with the commercial and financialaffairs of the German government. Heynen's official work was thetransportation of goods from the United States to Germany by way of Sweden, Switzerland, and Holland. In fact, he was up to his ears incovert operations.

The major German loans raised in the United States between 1915 and1918, according to Heynen, were as follows: The first loan, of $400,000,was made about September 1914 by the investment bankers Kuhn, Loeb& Co. Collateral of 25 million marks was deposited with Max M.Warburg in Hamburg, the German affiliate of Kuhn, Loeb & Co.Captain George B. Lester of U.S. Military Intelligence told the Senatethat Heynen's reply to the question "Why did you go to Kuhn, Loeb &Co?" was, "Kuhn, Loeb & Co. we considered the natural bankers of theGerman government and the Reichsbank."

The second loan, of $1.3 million, did not come directly from the UnitedStates but was negotiated by John Simon, an agent of the SuedeutscheDisconto-Gesellschaft, to secure funds for making shipments toGermany.

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The third loan was from the Chase National Bank (in the Morgan group)in the amount of three million dollars. The fourth loan was from theMechanics and Metals National Bank in the amount of one milliondollars. These loans financed German espionage activities in the United

States and Mexico. Some funds were traced to Sommerfeld, who was anadviser to Von Rintelen (another German espionage agent) and who waslater associated with Hjalmar Schacht and Emil Wittenberg. Sommerfeldwas to purchase ammunition for use in Mexico. He had an account withthe Guaranty Trust Company and from this payments were made toWestern Cartridge Co. of Alton, Illinois, for ammunition that wasshipped to El Paso for use in Mexico by Pancho Villa's bandits. About$400,000 was expended on ammunition, Mexican propaganda, and

similar activities.

The then German ambassador Count Von Bernstorff has recounted hisfriendship with Adolph von Pavenstedt, a senior partner of Amsinck &Co., which was controlled and in November 1917 owned by AmericanInternational Corporation. American International figures prominently inlater chapters; its board of directors contained the key names on WallStreet: Rockefeller, Kahn, Stillman, du Pont, Winthrop, etc. Accordingto Von Bernstorff, Von Pavenstedt was "intimately acquainted with all

the members of the Embassy."33 Von Bernstorff himself regarded VonPavenstedt as one of the most respected, "if not the most respectedimperial German in New York."34 Indeed, Von Pavenstedt was "for many years a Chief pay master of the German spy system in thiscountry."35 In other words, there is no question that Armsinck & Co.,controlled by American International Corporation, was intimatelyassociated with the funding of German wartime espionage in the UnitedStates. To clinch Von Bernstorff's last statement, there exists a

 photograph of a check in favor of Amsinck & Co., dated December 8,1917 — just four weeks after the start of the Bolshevik Revolution inRussia — signed Von Papen (another German espionage operator), andhaving a counterfoil bearing the notation "travelling expenses on Von W[i.e., Von Wedell]." French Strothers,36 who published the photograph,has stated that this check is evidence that Von Papen "became an

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accessory after the fact to a crime against American laws"; it also makesAmsinck & Co. subject to a similar charge.

Paul Bolo-Pasha, yet another German espionage agent, and a prominent

French financier formerly in the service of the Egyptian government,arrived in New York in March 1916 with a letter of introduction to VonPavenstedt. Through the latter, Bolo-Pasha met Hugo Schmidt, director of the Deutsche Bank in Berlin and its representative in the UnitedStates. One of Bolo-Pasha's projects was to purchase foreign newspapersso as to slant their editorials in favor of Germany. Funds for this program were arranged in Berlin in the form of credit with GuarantyTrust Company, with the credit subsequently made available to Amsinck 

& Co. Adolph von Pavenstedt, of Amsinck, in turn made the fundsavailable to Bolo-Pasha.

In other words, both Guaranty Trust Company and Amsinck & Co., asubsidiary of American International Corporation, were directlyinvolved in the implementation of German espionage and other activitiesin the United States. Some links can be established from these firms toeach of the major German operators in the U.S. — Dr. Albert, KarlHeynen, Von Rintelen, Von Papan, Count Jacques Minotto (see below),

and Paul Bolo-Pasha.

In 1919 the Senate Overman Committee also established that GuarantyTrust had an active role in financing German World War I efforts in an"unneutral" manner. The testimony of the U.S. intelligence officer Becker makes this clear:

In this mission Hugo Schmidt [of Deutsche Bank] was very largelyassisted by certain American banking institutions. It was while we were

neutral, but they acted to the detriment of the British interests, and I haveconsiderable data on the activity of the Guaranty Trust Co. in thatrespect, and would like to know whether the committee wishes me to gointo it.

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director of the Deutsche Bank and its New York representative. After ayear in New York, Minotto was sent by the Deutsche Bank to London,where he circulated in prominent political and diplomatic circles. At theoutbreak of World War I, Minotto returned to the United States and

immediately met with the German ambassador Count Von Bernstorff,after which he entered the employ of Guaranty Trust Company in NewYork. At Guaranty Trust, Minotto was under the direct orders of MaxMay, director of its foreign department and an associate of Swedish banker Olof Aschberg. Minotto was no minor bank official. Theinterrogatories of the Caillaux trials in Paris in 1919 established thatMinotto worked directly under Max May.39 On October 25, 1914,Guaranty Trust sent Jacques Minotto to South America to make a report

on the political, financial, and commercial situation. As he did inLondon, Washington, and New York, so Minotto moved in the highestdiplomatic and political circles here. One purpose of Minotto's missionin Latin America was to establish the mechanism by which GuarantyTrust could be used as an intermediary for the previously mentionedGerman fund raising on the London money market, which was thendenied to Germany because of World War I. Minotto returned to theUnited States, renewed his association with Count Von Bernstorff andCount Luxberg, and subsequently, in 1916, attempted to obtain a position with U.S. Naval Intelligence. After this he was arrested oncharges of pro-German activities. When arrested Minotto was workingat the Chicago plant of his father-in-law Louis Swift, of Swift & Co.,meatpackers. Swift put up the security for the $50,000 bond required tofree Minotto, who was represented by Henry Veeder, the Swift & Co.attorney. Louis Swift was himself arrested for pro-German activities at alater date. As an interesting and not unimportant coincidence, "Major"Harold H. Swift, brother of Louis Swift, was a member of the William

Boyce Thompson 1917 Red Cross Mission to Petrograd — that is, oneof the group of Wall Street lawyers and businessmen whose intimateconnections with the Russian Revolution are to be described later. HelenSwift Neilson, sister of Louis and Harold Swift, was later connectedwith the pro-Communist Abraham Lincoln Center "Unity." Thisestablished a minor link between German banks, American. banks,

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German espionage, and, as we shall see later, the Bolshevik Revolution.40 

Joseph Caillaux was a famous (sometimes called notorious) French

 politician. He was also associated with Count Minotto in the latter'sLatin America operations for Guaranty Trust, and was later implicated inthe famous French espionage cases of 1919, which had Bolshevik connections. In 1911, Caillaux became minister of finance and later inthe same year became premier of France. John Louis Malvy becameundersecretary of state in the Caillaux government. Several years later Madame Caillaux murdered Gaston Calmette, editor of the prominentParis newspaper  Figaro. The prosecution charged that Madame Caillaux

murdered Calmette to prevent publication of certain compromisingdocuments. This affair resulted in the departure of Caillaux and his wifefrom France. The couple went to Latin America and there met withCount Minotto, the agent of the Guaranty Trust Company who was inLatin America to establish intermediaries for German finance. CountMinotto was socially connected with the Caillaux couple in Rio deJaneiro and Sao Paulo, Brazil, in Montevideo, Uruguay, and in BuenosAires, Argentina. In other words, Count Minotto was a constantcompanion of the Caillaux couple while they were in Latin America.41

On returning to France, Caillaux and his wife stayed at Biarritz as guestsof Paul Bolo-Pasha, who was, as we have seen, also a German espionageoperator in the United States and France.42 Later, in July 1915, CountMinotto arrived in France from Italy, met with the Caillaux couple; thesame year the Caillaux couple also visited Bolo-Pasha again in Biarritz.In other words, in 1915 and 1916 Caillaux established a continuingsocial relationship with Count Minotto and Bolo-Pasha, both of whomwere German espionage agents in the United States.

Bolo-Pasha's work in France was to gain influence for Germany in theParis newspapers Le Temps and Figaro. Bolo-Pasha then went to NewYork, arriving February 24, 1916. Here he was to negotiate a loan of $2million — and here he was associated with Von Pavenstedt, the prominent German agent with Amsinck & Co.43 Severance Johnson, in

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The Enemy Within, has connected Caillaux and Malvy to the 1918abortive French Bolshevik revolution, and states that if the revolutionhad succeeded, "Malvy would have been the Trotsky of France hadCaillaux been its Lenin."44 Caillaux and Malvy formed a radical socialist

 party in France using German funds and were brought to trial for thesesubversive efforts. The court interrogatories in the 1919 Frenchespionage trials introduce testimony concerning New York bankers andtheir relationship with these German espionage operators. They also setforth the links between Count Minotto and Caillaux, as well as therelationship of the Guaranty Trust Company to the Deutsche Bank andthe cooperation between Hugo Schmidt of Deutsche Bank and Max Mayof Guaranty Trust Company. The French interrogatory (page 940) has

the following extract from the New York deposition of Count Minotto(page 10, and retranslated from the French):

QUESTION: Under whose orders were you at Guaranty Trust?

REPLY: Under the orders of Mr. Max May.

QUESTION: He was a Vice President?

ANSWER: He was Vice President and Director of the ForeignDepartment.

Later, in 1922, Max May became a director of the Soviet Ruskom-bank and represented the interests of Guaranty Trust in that bank. The Frenchinterrogatory establishes that Count Minotto, a German espionage agent,was in the employ of Guaranty Trust Company; that Max May was hissuperior officer; and that Max May was also closely associated withBolshevik banker Olof Aschberg. In brief: Max May of Guaranty Trust

was linked to illegal fund raising and German espionage in the UnitedStates during World War I; he was linked indirectly to the Bolshevik Revolution and directly to the establishment of Ruskombank, the firstinternational bank in the Soviet Union.

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It is too early to attempt an explanation for this seemingly inconsistent,illegal, and sometimes immoral international activity. In general, thereare two plausible explanations: the first, a relentless search for profits;the second — which agrees with the words of Otto Kahn of Kuhn, Loeb

& Co. and of American International Corporation in the epigraph to thischapter — the realization of socialist aims, aims which "should, and can, be brought about" by nonsocialist means.

Footnotes:

1John Moody, The Truth about the Trusts (New York: Moody

Publishing, 1904).2The J. P. Morgan Company was originally founded in London asGeorge Peabody and Co. in 1838. It was not incorporated until March21, 1940. The company ceased to exist in April 1954 when it mergedwith the Guaranty Trust Company, then its most important commercial bank subsidiary, and is today known as the Morgan Guarantee TrustCompany of New York.

3United States, House, Committee on Foreign Affairs, The Story of 

 Panama, Hearings on the Rainey Resolution, 1913. p. 53.

4Ibid., p. 60.

5Stanford, Calif. See also the Los Angeles Times, October 13, 1966.

6Later codirector with Hjalmar Schacht (Hitler's banker) and EmilWittenberg, of the Nationalbank für Deutschland.

7United States, Senate, Committee on Foreign Relations, Investigation of 

Mexican Affairs, 1920.

8Lincoln Steffens, The Letters of Lincoln Steffens (New York: Harcourt,Brace, 1941, I:386

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9U.S., Senate, Committee on Foreign Relations, Investigation of 

Mexican Affairs, 1920, pts. 2, 18, p. 681.

10Ibid.

11 New York Times, January 23, 1919.

12U.S., Senate, Committee on Foreign Relations, op. cit., pp. 795-96.

13U.S., Senate, Hearings Before the Special Committee Investigating the

Munitions Industry, 73-74th Cong., 1934-37, pt. 25, p. 7666.

14U.S. State Dept. Decimal File, 861.51/110 (316-116-682).

15U.S. State Dept. Decimal File, 861.51/112.

16U.S. State Dept. Decimal File, 861.51/111.

17Handwritten in parentheses.

18Olof Aschberg, En Vandrande Jude Frän Glasbruksgatan (Stockholm:Albert Bonniers Förlag, n.d.), pp. 98-99, which is included in Memoarer 

(Stockholm: Albert Bonniers Förlag, 1946). See also Gästboken(Stockholm: Tidens Förlag, 1955) for further material on Aschberg.

19Aschberg, p. 123.

20 New York Times, August 4, 1916.

21Michael Futrell, Northern Underground (London: Faber and Faber,1963), p. 162.

22See Robert Paul Browder and Alexander F. Kerensky, The Russian Provisional government, 1917 (Stanford, Calif.: Stanford UniversityPerss, 1961), 3: 1365. "Via Bank" is obviously Nya Banken.

23U.S. State Dept. Decimal File, 861.00/1130.

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24U.S. State Dept. Decimal File, 861.516/129, August 28, 1922. A StateDept. report from Stockholm, dated October 9, 1922 (861.516/137),states in regard to Aschberg, "I met Mr. Aschberg some weeks ago andin the conversation with him he substantially stated all that appeared in

this report. He also asked me to inquire whether he could visit theUnited States and gave as references some of the prominent banks. Inconnection with this, however, I desire to call the department's attentionto Document 54 of the Sisson Documents, and also to many other dispatches which this legation wrote concerning this man during the war,whose reputation and standing is not good. He is undoubtedly workingclosely in connection with the Soviets, and during the entire war he wasin close cooperation with the Germans" (U.S. State Dept. Decimal File,

861.516/137, Stockholm, October 9, 1922. The report was signed by Ira N. Morris).

25Ibid., 861.516/130, September 13, 1922.

26Ibid.

27Ibid.

28

Ibid., 861.516/140, Stockholm, October 23, 1922.29Ibid., 861.516/147, December 8, 1922.

30Ibid., 861.516/144, November 18, 1922.

31Ibid., 861.316/197, Stockholm, March 7, 1924.

32This section is based on the Overman Committee hearings, U.S.,Senate, Brewing and Liquor Interests and German and Bolshevik 

 Propaganda, Hearings before the Subcommittee on the Judiciary, 65thCong., 1919, 2:2154-74.

33Count Von Bernstorff, My Three Years in America (New York:Scribner's, 1920), p. 261.

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34Ibid.

35Ibid.

36

French Strothers, Fighting Germany's Spies (Garden City, N.Y.:Doubleday, Page, 1918), p. 152.

37 U.S., Senate, Overman Committee, 2:2009.

38This section is based on the following sources (as well as those citedelsewhere): Jean Bardanne, Le Colonel Nicolai: espion de genie (Paris:Editions Siboney, n.d.); Cours de Justice, Affaire Caillaux,  Loustalot et 

Comby: Procedure Generale Interrogatoires (Paris, 1919), pp. 349-50,

937-46; Paul Vergnet, L'Affaire Caillaux (Paris 1918), especially thechapter titled "Marx de Mannheim"; Henri Guernut, Emile Kahn, andCamille M. Lemercier, Etudes documentaires sur L'Affaire Caillaux

(Paris, n.d.), pp. 1012-15; and George Adam, Treason and Tragedy: An

 Account of French War Trials (London: Jonathan Cape, 1929).

39See p. 70.

40This Interrelationship is dealt with extensively in the three-volume

Overman Committee report of 1919. See bibliography.41See Rudolph Binion, Defeated Leaders (New York: ColumbiaUniversity Press, 1960).

42George Adam, Treason and Tragedy: An Account of French War 

Trials (London: Jonathan Cape, 1929).

43Ibid.

44The Enemy Within (London: George Allen & Unwin, 1920).

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Chapter V

THE AMERICAN RED CROSS MISSION IN RUSSIA — 1917

Poor Mr. Billings believed he was in charge of a scientific mission

for the relief of Russia .... He was in reality nothing but a mask — 

the Red Cross complexion of the mission was nothing but a mask. 

Cornelius Kelleher, assistant to William Boyce Thompson (in George F.

 Kennan, Russia Leaves the War)

The Wall Street project in Russia in 1917 used the Red Cross Mission asits operational vehicle. Both Guaranty Trust and National City Bank hadrepresentatives in Russia at the time of the revolution. Frederick M.Corse of the National City Bank branch in Petrograd was attached to theAmerican Red Cross Mission, of which a great deal will be said later.Guaranty Trust was represented by Henry Crosby Emery. Emery wastemporarily held by the Germans in 1918 and then moved on torepresent Guaranty Trust 'in China.

Up to about 1915 the most influential person in the American Red Cross National Headquarters in Washington, D.C. was Miss Mabel Boardman.An active and energetic promoter, Miss Boardman had been the movingforce behind the Red Cross enterprise, although its endowment camefrom wealthy and prominent persons including J. P. Morgan, Mrs. E. H.

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Harriman, Cleveland H. Dodge, and Mrs. Russell Sage. The 1910 fund-raising campaign for $2 million, for example, was successful only because it was supported by these wealthy residents of New York City.In fact, most of the money came from New York City. J.P. Morgan

himself contributed $100,000 and seven other contributors in New York City amassed $300,000. Only one person outside New York Citycontributed over $10,000 and that was William J. Boardman, MissBoardman's father. Henry P. Davison was chairman of the 1910 NewYork Fund-Raising Committee and later became chairman of the War Council of the American Red Cross. In other words, in World War I theRed Cross depended heavily on Wall Street, and specifically on theMorgan firm.

The Red Cross was unable to cope with the demands of World War Iand in effect was taken over by these New York bankers. According toJohn Foster Dulles, these businessmen "viewed the American Red Crossas a virtual arm of government, they envisaged making an incalculablecontribution to the winning of the war."1 In so doing they made amockery of the Red Cross motto: "Neutrality and Humanity."

In exchange for raising funds, Wall Street asked for the Red Cross War 

Council; and on the recommendation of Cleveland H. Dodge, one of Woodrow Wilson's financial backers, Henry P. Davison, a partner in J.P.Morgan Company, became chairman. The list of administrators of theRed Cross then began to take on the appearance of the New York Directory of Directors: John D. Ryan, president of Anaconda Copper Company (see frontispiece); George W. Hill, president of the AmericanTobacco Company; Grayson M.P. Murphy, vice president of theGuaranty Trust Company; and Ivy Lee, public relations expert for the

Rockefellers. Harry Hopkins, later to achieve fame under PresidentRoosevelt, became assistant to the general manager of the Red Cross inWashington, D.C.

The question of a Red Cross Mission to Russia came before the thirdmeeting of this reconstructed War Council, which was held in the Red

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Cross Building, Washington, D.C., on Friday, May 29, 1917, at 11:00A.M. Chairman Davison was deputed to explore the idea with Alexander Legge of the International Harvester Company. SubsequentlyInternational Harvester, which had considerable interests in Russia,

 provided $200,000 to assist financing the Russian mission. At a later meeting it was made known that William Boyce Thompson, director of the Federal Reserve Bank of New York, had "offered to pay the entireexpense of the commission"; this offer was accepted in a telegram:"Your desire to pay expenses of commission to Russia is very muchappreciated and from our point of view very important."2 

The members of the mission received no pay. All expenses were paid by

William Boyce Thompson and the $200,000 from InternationalHarvester was apparently used in Russia for political subsidies. Weknow from the files of the U.S. embassy in Petrograd that the U.S. RedCross gave 4,000 rubles to Prince Lvoff, president of the Council of Ministers, for "relief of revolutionists" and 10,000 rubles in two payments to Kerensky for "relief of political refugees."

AMERICAN RED CROSS MISSION TO RUSSIA, 1917

In August 1917 the American Red Cross Mission to Russia had only anominal relationship with the American Red Cross, and must truly have been the most unusual Red Cross Mission in history. All expenses,including those of the uniforms — the members were all colonels,majors, captains, or lieutenants — were paid out of the pocket of William Boyce Thompson. One contemporary observer dubbed the all-officer group an "Haytian Army":

The American Red Cross delegation, about forty Colonels, Majors,Captains and Lieutenants, arrived yesterday. It is headed by Colonel(Doctor) Billings of Chicago, and includes Colonel William B.Thompson and many doctors and civilians, all with military titles; wedubbed the outfit the "Haytian Army" because there were no privates.They have come to fill no clearly defined mission, as far as I can find

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out, in fact Gov. Francis told me some time ago that he had urged theynot be allowed to come, as there were already too many missions fromthe various allies in Russia. Apparently, this Commission imagined therewas urgent call for doctors and nurses in Russia; as a matter of fact there

is at present a surplus of medical talent and nurses, native and foreign inthe country and many haft-empty hospitals in the large cities.3 

The mission actually comprised only twenty-four (not forty), havingmilitary rank from lieutenant colonel down to lieutenant, and wassupplemented by three orderlies, two motion-picture photographers, andtwo interpreters, without rank. Only five (out of twenty-four) weredoctors; in addition, there were two medical researchers. The mission

arrived by train in Petrograd via Siberia in August 1917. The fivedoctors and orderlies stayed one month, returning to the United States onSeptember 11. Dr. Frank Billings, nominal head of the mission and professor of medicine at the University of Chicago, was reported to bedisgusted with the overtly political activities of the majority of themission. The other medical men were William S. Thayer, professor of medicine at Johns Hopkins University; D. J. McCarthy, Fellow of Phipps Institute for Study and Prevention of Tuberculosis, atPhiladelphia; Henry C. Sherman, professor of food chemistry at

Columbia University; C. E. A. Winslow, professor of bacteriology andhygiene at Yale Medical School; Wilbur E. Post, professor of medicineat Rush Medical College; Dr. Malcolm Grow, of the Medical OfficersReserve Corps of the U.S. Army; and Orrin Wightman, professor of clinical medicine, New York Polyclinic Hospital. George C. Whipplewas listed as professor of sanitary engineering at Harvard University butin fact was partner of the New York firm of Hazen, Whipple & Fuller,engineering consultants. This is significant because Malcolm Pirnie — 

of whom more later — was listed as an assistant sanitary engineer andemployed as an engineer by Hazen, Whipple & Fuller.

The majority of the mission, as seen from the table, was made up of lawyers, financiers, and their assistants, from the New York financialdistrict. The mission was financed by William B. Thompson, described

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in the official Red Cross circular as "Commissioner and BusinessManager; Director United States Federal Bank of New York."Thompson brought along Cornelius Kelleher, described as an attache tothe mission but actually secretary to Thompson and with the same

address — 14 Wall Street, New York City. Publicity for the mission washandled by Henry S. Brown, of the same address. Thomas Day Thacher was an attorney with Simpson, Thacher & Bartlett, a firm founded by hisfather, Thomas Thacher, in 1884 and prominently involved in railroadreorganization and mergers. Thomas as junior first worked for the familyfirm, became assistant U.S. attorney under Henry L. Stimson, andreturned to the family firm in 1909. The young Thacher was a closefriend of Felix Frankfurter and later became assistant to Raymond

Robins, also on the Red Cross Mission. In 1925 he was appointeddistrict judge under President Coolidge, became solicitor general under Herbert Hoover, and was a director of the William Boyce ThompsonInstitute.

THE 1917 AMERICAN RED CROSS MISSION TO

RUSSIA

Members from

Wall Street  financial 

community and 

their affiliations

Medical 

doctors

Orderlies,

interpreters,

etc. 

Andrews (Liggett& Myers Tobacco)

Billings (doctor) Brooks (orderly)

Barr (Chase National Bank)

Grow (doctor) Clark (orderly)

Brown (c/o WilliamB. Thompson)

McCarthy (medicalresearch; doctor)

Rocchia (orderly)

Cochran (McCannCo.)

Post (doctor)

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Kelleher (c/oWilliam B.Thompson)

Sherman (foodchemistry)

Travis (movies)

 Nicholson (Swirl &Co.) Thayer (doctor) Wyckoff (movies)

Pirnie (Hazen,Whipple & Fuller)

Redfield (Stetson,Jennings &Russell)

Wightman(medicine)

Hardy (justice)

Robins (mining promoter) Winslow (hygiene) Horn(transportation)

Swift (Swift & Co.)

Thacher (Simpson,Thacher & Bartlett)

Thompson (FederalReserve Bank of 

 N.Y.)Wardwell (Stetson,Jennings & Russell)

Whipple (Hazen,Whipple & Fuller)

Corse (NationalCity Bank)

Magnuson(recommended byconfidential agentof ColonelThompson)

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Alan Wardwell, also a deputy commissioner and secretary to thechairman, was a lawyer with the law firm of Stetson, Jennings & Russellof 15 Broad Street, New York City, and H. B. Redfield was lawsecretary to Wardwell. Major Wardwell was the son of William Thomas

Wardwell, long-time treasurer of Standard Oil of New Jersey andStandard Oil of New York. The elder Wardwell was one of the signersof the famous Standard Oil trust agreement, a member of the committeeto organize Red Cross activities in the Spanish American War, and adirector of the Greenwich Savings Bank. His son Alan was a director notonly of Greenwich Savings, but also of Bank of New York and Trust Co.and the Georgian Manganese Company (along with W. AverellHarriman, a director of Guaranty Trust). In 1917 Alan Wardwell was

affiliated with Stetson, Jennings 8c Russell and later joined Davis, Polk,Wardwell, Gardner & Read (Frank L. Polk was acting secretary of stateduring the Bolshevik Revolution period). The Senate OvermanCommittee noted that Wardwell was favorable to the Soviet regimealthough Poole, the State Department official on the spot, noted that"Major Wardwell has of all Americans the widest personal knowledge of the terror" (316-23-1449). In the 1920s Wardwell became active withthe Russian-American Chamber of Commerce in promoting Soviet tradeobjectives.

The treasurer of the mission was James W. Andrews, auditor of Liggett& Myers Tobacco Company of St. Louis. Robert I. Barr, another member, was listed as a deputy commissioner; he was a vice president of Chase Securities Company (120 Broadway) and of the Chase NationalBank. Listed as being in charge of advertising was William Cochran of 61 Broadway, New York City. Raymond Robins, a mining promoter,was included as a deputy commissioner and described as "a social

economist." Finally, the mission included two members of Swift &Company of Union Stockyards, Chicago. The Swifts have been previously mentioned as being connected with German espionage in theUnited States during World War I. Harold H. Swift, deputycommissioner, was assistant to the vice president of Swift & Company;

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William G. Nicholson was also with Swift & Company, UnionStockyards.

Two persons were unofficially added to the mission after it arrived in

Petrograd: Frederick M. Corse, representative of the National City Bank in Petrograd; and Herbert A. Magnuson, who was "very highlyrecommended by John W. Finch, the confidential agent in China of Colonel William B. Thompson."4 

The Pirnie papers, deposited at the Hoover Institution, contain primarymaterial on the mission. Malcolm Pirnie was an engineer employed bythe firm of Hazen, Whipple & Fuller, consulting engineers, of 42 Street, New York City. Pirnie was a member of the mission, listed on amanifest as an assistant sanitary engineer. George C. Whipple, a partner in the firm, was also included in the group. The Pirnie papers include anoriginal telegram from William B. Thompson, inviting assistant sanitaryengineer Pirnie to meet with him and Henry P. Davison, chairman of theRed Cross War Council and partner in the J.P. Morgan firm, beforeleaving for Russia. The telegram reads as follows:

WESTERN UNION TELEGRAM New York, June 21, 1917

To Malcolm Pirnie

I should very much like to have you dine with me at the MetropolitanClub, Sixteenth Street and Fifth Avenue New York City at eight o'clock tomorrow Friday evening to meet Mr. H. P. Davison.

W. B. Thompson, 14 Wall Street

The files do not elucidate why Morgan partner Davison and Thompson,director of the Federal Reserve Bank — two of the most prominentfinancial men in New York — wished to have dinner with an assistantsanitary engineer about to leave for Russia. Neither do the files explainwhy Davison was subsequently unable to meet Dr. Billings and thecommission itself, nor why it was necessary to advise Pirnie of his

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inability to do so. But we may surmise that the official cover of themission — Red Cross activities — was of significantly less interest thanthe Thompson-Pirnie activities, whatever they may have been. We doknow that Davison wrote to Dr. Billings on June 25, 1917:

Dear Doctor Billings:

It is a disappointment to me and to my associates on the War Councilnot have been able to meet in a body the members of your Commission ....

A copy of this letter was also mailed to assistant sanitary engineer Pirniewith a personal letter from Morgan banker Henry P. Davison, which

read:

My dear Mr. Pirnie:

You will, I am sure, entirely understand the reason for the letter to Dr.Billings, copy of which is enclosed, and accept it in the spirit in which itis sent ....

The purpose of Davison's letter to Dr. Billings was to apologize to the

commission and Billings for being unable to meet with them. We maythen be justified in supposing that some deeper arrangements were made by Davison and Pirnie concerning the activities of the mission in Russiaand that these arrangements were known to Thompson. The probablenature of these activities will be described later.5 

The American Red Cross Mission (or perhaps we should call it the WallStreet Mission to Russia) also employed three Russian-English

interpreters: Captain Ilovaisky, a Russian Bolshevik; Boris Reinstein, aRussian-American, later secretary to Lenin, and the head of Karl Radek'sBureau of International Revolutionary Propaganda, which alsoemployed John Reed and Albert Rhys Williams; and Alexander Gumberg (alias Berg, real name Michael Gruzenberg), who was a brother of Zorin, a Bolshevik minister. Gumberg was also the chief 

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Bolshevik agent in Scandinavia. He later became a confidential assistantto Floyd Odlum of Atlas Corporation in the United States as well as anadviser to Reeve Schley, a vice president of the Chase Bank.

It should be asked in passing: How useful were the translations supplied by these interpreters? On September 13, 1918, H. A. Doolittle, Americanvice consul at Stockholm, reported to the secretary of state on aconversation with Captain Ilovaisky (who was a "close personal friend"of Colonel Robins of the Red Cross Mission) concerning a meeting of the Murman Soviet and the Allies. The question of inviting the Allies toland at Murman was under discussion at the Soviet, with Major Thacher of the Red Cross Mission acting for the Allies. Ilovaisky interpreted

Thacher's views for the Soviet. "Ilovaisky spoke at some length inRussian, supposedly translating for Thacher, but in reality for Trotsky ...."to the effect that "the United States would never permit such a landingto occur and urging the speedy recognition of the Soviets and their  politics."6 Apparently Thacher suspected he was being mistranslated andexpressed his indignation. However, "Ilovaisky immediately telegraphedthe substance to Bolshevik headquarters and through their press bureauhad it appear in all the papers as emanating from the remarks of Major Thacher and as the general opinion of all truly accredited American

representatives."7 

Ilovaisky recounted to Maddin Summers, U.S. consul general inMoscow, several instances where he (Ilovaisky) and Raymond Robins of the Red Cross Mission had manipulated the Bolshevik press, especially"in regard to the recall of the Ambassador, Mr. Francis." He admittedthat they had not been scrupulous, "but had acted according to their ideas of right, regardless of how they might have conflicted with the

 politics of the accredited American representatives."8

 This then was the American Red Cross Mission to Russia in 1917.

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AMERICAN RED CROSS MISSION TO RUMANIA

In 1917 the American Red Cross also sent a medical assistance missionto Rumania, then fighting the Central Powers as an ally of Russia. Acomparison of the American Red Cross Mission to Russia with that sentto Rumania suggests that the Red Cross Mission based in Petrograd hadvery little official connection with the Red Cross and even lessconnection with medical assistance. Whereas the Red Cross Mission toRumania valiantly upheld the Red Cross twin principles of "humanity"and "neutrality," the Red Cross Mission in Petrograd flagrantly abused both.

The American Red Cross Mission to Rumania left the United States inJuly 1917 and located itself at Jassy. The mission consisted of thirty persons under Chairman Henry W. Anderson, a lawyer from Virginia.Of the thirty, sixteen were either doctors or surgeons. By comparison,out of twenty-nine individuals with the Red Cross Mission to Russia,only three were doctors, although another four members were fromuniversities and specialized in medically related fields. At the most,

seven could be classified as doctors with the mission to Russia comparedwith sixteen with the mission to Rumania. There was about the samenumber of orderlies and nurses with both missions. The significantcomparison, however, is that the Rumanian mission had only twolawyers, one treasurer, and one engineer. The Russian mission hadfifteen lawyers and businessmen. None of the Rumanian missionlawyers or doctors came from anywhere near the New York area but all,except one (an "observer" from the Department of Justice inWashington, D.C.), of the lawyers and businessmen with the Russianmission came from that area. Which is to say that more than half thetotal of the Russian mission came from the New York financial district.In other words, the relative composition of these missions confirms thatthe mission to Rumania had a legitimate purpose — to practicemedicine — while the Russian mission had a non-medical and strictly

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 political objective. From its personnel, it could be classified as acommercial or financial mission, but from its actions it was a subversive political action group.

PERSONNEL WITH THE AMERICAN RED CROSSMISSIONS TO RUSSIA AND RUMANIA, 1917

AMERICAN RED CROSSMISSION TO

  Personnel Russia Rumania

Medical (doctorsand surgeons) 7 16  

Orderlies, nurses 7 10

Lawyers and businessmen 15 4

TOTAL 29 30

SOURCES:

American Red Cross, Washington, D.C.

U.S. Department of State, Petrograd embassy, Red Cross file,1917.

The Red Cross Mission to Rumania remained at its post in Jassy for theremainder of 1917 and into 1918. The medical staff of the American RedCross Mission in Russia — the seven doctors — quit in disgust inAugust 1917, protested the political activities of Colonel Thompson, andreturned to the United States. Consequently, in September 1917, whenthe Rumanian mission appealed to Petrograd for American doctors andnurses to help out in the near crisis conditions in Jassy, there were noAmerican doctors or nurses in Russia available to go to Rumania.

Whereas the bulk of the mission in Russia occupied its time in internal political maneuvering, the mission in Rumania threw itself into relief 

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work as soon as it arrived. On September 17, 1917, a confidential cablefrom Henry W. Anderson, chairman of the Rumania mission, to theAmerican ambassador Francis in Petrograd requested immediate andurgent help in the form of $5 million to meet an impending catastrophe

in Rumania. Then followed a series of letters, cables, andcommunications from Anderson to Francis appealing, unsuccessfully,for help.

On September 28, 1917, Vopicka, American minister in Rumania,cabled Francis at length, for relay to Washington, and repeatedAnderson's analysis of the Rumanian crisis and the danger of epidemics — and worse — as winter closed in:

Considerable money and heroic measures required prevent far reachingdisaster .... Useless try handle situation without someone with authorityand access to government . . . With proper organization to look after transport receive and distribute supplies.

The hands of Vopicka and Anderson were tied as all Rumanian suppliesand financial transactions were handled by the Red Cross Mission inPetrograd — and Thompson and his staff of fifteen Wall Street lawyers

and businessmen apparently had matters of greater concern thatRumanian Red Cross affairs. There is no indication in the Petrogradembassy files at the U.S. State Department that Thompson, Robins, or Thacher concerned himself at any time in 1917 or 1918 with the urgentsituation in Rumania. Communications from Rumania went toAmbassador Francis or to one of his embassy staff, and occasionallythrough the consulate in Moscow.

By October 1917 the Rumanian situation reached the crisis point.

Vopicka cabled Davison in New York (via Petrograd) on October 5:

Most urgent problem here .... Disastrous effect feared .... Could you possibly arrange special shipment .... Must rush or too late.

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Then on November 5 Anderson cabled the Petrograd embassy sayingthat delays in sending help had already "cost several thousand lives." On November 13 Anderson cabled Ambassador Francis concerningThompson's lack of interest in Rumanian conditions:

Requested Thompson furnish details all shipments as received but havenot obtained same .... Also requested him keep me posted as to transportconditions but received very little information.

Anderson then requested that Ambassador Francis intercede on his behalf in order to have funds for the Rumanian Red Cross handled in aseparate account in London, directly under Anderson and removed fromthe control of Thompson's mission.

THOMPSON IN KERENSKY'S RUSSIA

What then was the Red Cross Mission doing? Thompson certainlyacquired a reputation for opulent living in Petrograd, but apparently heundertook only two major projects in Kerensky's Russia: support for anAmerican propaganda program and support for the Russian Liberty

Loan. Soon after arriving in Russia Thompson met with MadameBreshko-Breshkovskaya and David Soskice, Kerensky's secretary, andagreed to contribute $2 million to a committee of popular education sothat it could "have its own press and... engage a staff of lecturers, withcinematograph illustrations" (861.00/ 1032); this was for the propaganda purpose of urging Russia to continue in the war against Germany.According to Soskice, "a packet of 50,000 rubles" was given to Breshko-Breshkovskaya with the statement, "This is for you to expend accordingto your best judgment." A further 2,100,000 rubles was deposited into a

current bank account. A letter from J. P. Morgan to the State Department(861.51/190) confirms that Morgan cabled 425,000 rubles to Thompsonat his request for the Russian Liberty Loan; J. P. also conveyed theinterest of the Morgan firm regarding "the wisdom of making anindividual subscription through Mr. Thompson" to the Russian Liberty

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Loan. These sums were transmitted through the National City Bank  branch in Petrograd.

THOMPSON GIVES THE BOLSHEVIKS $1 MILLION

Of greater historical significance, however, was the assistance given tothe Bolsheviks first by Thompson, then, after December 4, 1917, byRaymond Robins.

Thompson's contribution to the Bolshevik cause was recorded in thecontemporary American press. The Washington Post of February 2,1918, carried the following paragraphs:

GIVES BOLSHEVIKI A MILLION

W. B. Thompson, Red Cross Donor, Believes Party Misrepresented. New York, Feb. 2 (1918). William B. Thompson, who was in Petrogradfrom July until November last, has made a personal contribution of $1,000,000 to the Bolsheviki for the purpose of spreading their doctrinein Germany and Austria.

Mr. Thompson had an opportunity to study Russian conditions as headof the American Red Cross Mission, expenses of which also werelargely defrayed by his personal contributions. He believes that theBolsheviki constitute the greatest power against Pro-Germanism inRussia and that their propaganda has been undermining the militaristregimes of the General Empires.

Mr. Thompson deprecates American criticism of the Bolsheviki. He

 believes they have been misrepresented and has made the financialcontribution to the cause in the belief that it will be money well spent for the future of Russia as well as for the Allied cause.

Hermann Hagedorn's biography The Magnate: William Boyce

Thompson and His Time (1869-1930) reproduces a photograph of acablegram from J.P. Morgan in New York to W. B. Thompson, "Care

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American Red Cross, Hotel Europe, Petrograd." The cable is date-stamped, showing it was received at Petrograd "8-Dek 1917" (8December 1917), and reads:

 New York Y757/5 24W5 Nil — Your cable second received. We have paid National City Bank one million dollars as instructed — Morgan.

The National City Bank branch in Petrograd had been exempted fromthe Bolshevik nationalization decree — the only foreign or domesticRussian bank to have been so exempted. Hagedorn says that this milliondollars paid into Thompson's NCB account was used for "political purposes."

SOCIALIST MINING PROMOTER RAYMOND ROBINS9 

William B. Thompson left Russia in early December 1917 to returnhome. He traveled via London, where, in company with Thomas Lamontof the J.P. Morgan firm, he visited Prime Minister Lloyd George, anepisode we pick up in the next chapter. His deputy, Raymond Robins,was left in charge of the Red Cross Mission to Russia. The general

impression that Colonel Robins presented in the subsequent months wasnot overlooked by the press. In the words of the Russian newspaper  Russkoe Slovo, Robins "on the one hand represents American labor andon the other hand American capital, which is endeavoring through theSoviets to gain their Russian markets."10 

Raymond Robins started life as the manager of a Florida phosphatecompany commissary. From this base he developed a kaolin deposit,then prospected Texas and the Indian territories in the late nineteenth

century. Moving north to Alaska, Robins made a fortune in the Klondikegold rush. Then, for no observable reason, he switched to socialism andthe reform movement. By 1912 he was an active member of Roosevelt'sProgressive Party. He joined the 1917 American Red Cross Mission toRussia as a "social economist."

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There is considerable evidence, including Robins' own statements, thathis reformist social-good appeals were little more than covers for theacquisition of further power and wealth, reminiscent of Frederick Howe's suggestions in Confessions of a Monopolist. For example, in

February 1918 Arthur Bullard was in Petrograd with the U.S. Committeeon Public Information and engaged in writing a long memorandum for Colonel Edward House. This memorandum was given to Robins byBullard for comments and criticism before transmission to House inWashington, D.C. Robins' very unsocialistic and imperialistic commentswere to the effect that the manuscript was "uncommonly discriminating,far-seeing and well done," but that he had one or two reservations — in particular, that recognition of the Bolsheviks was long overdue, that it

should have been effected immediately, and that had the U.S. sorecognized the Bolsheviks, "I believe that we would now be in control of the surplus resources of Russia and have control officers at all points onthe frontier."11 

This desire to gain "control of the surplus resources of Russia" was alsoobvious to Russians. Does this sound like a social reformer in theAmerican Red Cross or a Wall Street mining promoter engaged in the practical exercise of imperialism?

In any event, Robins made no bones about his support for theBolshevists.12 Barely three weeks after the Bolshevik phase of theRevolution started, Robins cabled Henry Davison at Red Crossheadquarters: "Please urge upon the President the necessity of our continued intercourse with the Bolshevik Government." Interestingly,this cable was in reply to a cable instructing Robins that the "Presidentdesires the withholding of direct communications by representatives of 

the United States with the Bolshevik Government."13

Several StateDepartment reports complained about the partisan nature of Robins'activities. For example, on March 27, 1919, Harris, the American consulat Vladivostok, commented on a long conversation he had had withRobins and protested gross inaccuracies in the latter's reporting. Harriswrote, "Robins stated to me that no German and Austrian prisoners of 

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war had joined the Bolshevik army up to May 1918. Robbins knew thisstatement was absolutely false." Harris then proceeded to provide thedetails of evidence available to Robins.14 

Limit of Area Controlled by Bolsheviks, January 1918 

Harris concluded, "Robbins deliberately misstated facts concerningRussia at that time and he has been doing it ever since."

On returning to the United States in 1918, Robins continued his effortsin behalf of the Bolsheviks. When the files of the Soviet Bureau were

seized by the Lusk Committee, it was found that Robins had had"considerable correspondence" with Ludwig Martens and other membersof the bureau. One of the more interesting documents seized was a letter from Santeri Nuorteva (alias Alexander Nyberg), the first Sovietrepresentative in the U.S., to "Comrade Cahan," editor of the New York 

 Daily Forward. The letter called on the party faithful to prepare the wayfor Raymond Robins:

(To Daily) FORWARD July 6, 1918

Dear Comrade Cahan:

It is of the utmost importance that the Socialist press set up a clamor immediately that Col. Raymond Robins, who has just returned fromRussia at the head of the Red Cross Mission, should be heard from in a public report to the American people. The armed intervention danger hasgreatly increased. The reactionists are using the Czecho-Slovak adventure to bring about invasion. Robins has all the facts about this andabout the situation in Russia generally. He takes our point of view.

I am enclosing copy of Call editorial which shows a general line of argument, also some facts about Czecho-Slovaks.

Fraternally,

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PS&AU Santeri Nuorteva

THE INTERNATIONAL RED CROSS AND REVOLUTION

Unknown to its administrators, the Red Cross has been used from timeto time as a vehicle or cover for revolutionary activities. The use of RedCross markings for unauthorized purposes is not uncommon. When Tsar  Nicholas was moved from Petrograd to Tobolsk allegedly for his safety(although this direction was towards danger rather than safety), the traincarried Japanese Red Cross placards. The State Department files containexamples of revolutionary activity under cover of Red Cross activities.For example, a Russian Red Cross official (Chelgajnov) was arrested inHolland in 1919 for revolutionary acts (316-21-107). During theHungarian Bolshevik revolution in 1918, led by Bela Kun, Russianmembers of the Red Cross (or revolutionaries operating as members of the Russian Red Cross) were found in Vienna and Budapest. In 1919 theU.S. ambassador in London cabled Washington startling news; throughthe British government he had learned that "several Americans who hadarrived in this country in the uniform of the Red Cross and who statedthat they were Bolsheviks . . . were proceeding through France to

Switzerland to spread Bolshevik propaganda." The ambassador notedthat about 400 American Red Cross people had arrived in London in November and December 1918; of that number one quarter returned tothe United States and "the remainder insisted on proceeding to France."There was a later report on January 15, 1918, to the effect that an editor of a labor newspaper in London had been approached on three differentoccasions by three different American Red Cross officials who offeredto take commissions to Bolsheviks in Germany. The editor had

suggested to the U.S. embassy that it watch American Red Cross personnel. The U.S. State Department took these reports seriously andPolk cabled for names, stating, "If true, I consider it of the greatestimportance" (861.00/3602 and /3627).

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To summarize: the picture we form of the 1917 American Red CrossMission to Russia is remote from one of neutral humanitarianism. Themission was in fact a mission of Wall Street financiers to influence and pave the way for control, through either Kerensky or the Bolshevik 

revolutionaries, of the Russian market and resources. No other explanation will explain the actions of the mission. However, neither Thompson nor Robins was a Bolshevik. Nor was either even a consistentsocialist. The writer is inclined to the interpretation that the socialistappeals of each man were covers for more prosaic objectives. Each manwas intent upon the commercial; that is, each sought to use the political process in Russia for personal financial ends. Whether the Russian people wanted the Bolsheviks was of no concern. Whether the Bolshevik 

regime would act against the United States — as it consistently didlater — was of no concern. The single overwhelming objective was togain political and economic influence with the new regime, whatever itsideology. If William Boyce Thompson had acted alone, then hisdirectorship of the Federal Reserve Bank would be inconsequential.However, the fact that his mission was dominated by representatives of Wall Street institutions raises a serious question — in effect, whether themission was a planned, premeditated operation by a Wall Streetsyndicate. This the reader will have to judge for himself, as the rest of the story unfolds.

Footnotes:

1John Foster Dulles, American Red Cross (New York: Harper, 1950).

2Minutes of the War Council of the American National Red Cross

(Washington, D.C., May 1917)

3Gibbs Diary, August 9, 1917. State Historical Society of Wisconsin.

4 Billings report to Henry P. Davison, October 22, 1917, American RedCross Archives.

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5The Pirnie papers also enable us to fix exactly the dates that members of the mission left Russia. In the case of William B. Thompson, this date iscritical to the argument of this book: Thompson left Petrograd for London on December 4, 1917. George F. Kennan states Thompson left

Petrograd on November 27, 1917 (Russia Leaves the War, p. 1140).6U.S. State Dept. Decimal File, 861.00/3644.

7Ibid.

8Ibid.

9Robins is the correct spelling. The name is consistently spelled

"Robbins" in the Stale Department files.10U.S. State Dept. Decimal File, 316-11-1265, March 19, 1918.

11Bullard ms., U.S. State Dept. Decimal File, 316-11-1265.

12The New World Review (fall 1967, p. 40) comments on Robins, notingthat he was "in sympathy with the aims of the Revolution, although acapitalist "

13Petrograd embassy, Red Cross file.

14U.S. State Dept. Decimal File, 861.00/4168.

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Chapter VI

CONSOLIDATION AND EXPORT OF THE REVOLUTION

Marx's great book  Das Kapital is at once a monument of reasoning

and a storehouse of facts.

 Lord Milner, member of the British War Cabinet, 1917, and director of 

the London Joint Stock  Bank 

William Boyce Thompson is an unknown name in twentieth-century

history, yet Thompson played a crucial role in the Bolshevik Revolution.1 Indeed, if Thompson had not been in Russia in 1917,subsequent history might have followed a quite different course.Without the financial and, more important, the diplomatic and propaganda assistance given to Trotsky and Lenin by Thompson,Robins, and their New York associates, the Bolsheviks may well havewithered away and Russia evolved into a socialist but constitutionalsociety.

Who was William Boyce Thompson? Thompson was a promoter of mining stocks, one of the best in a high-risk business. Before World War I he handled stock-market operations for the Guggenheim copper interests. When the Guggenheims needed quick capital for a stock-market struggle with John D. Rockefeller, it was Thompson who promoted Yukon Consolidated Goldfields before an unsuspecting publicto raise a $3.5 million war chest. Thompson was manager of theKennecott syndicate, another Guggenheim operation, valued at $200

million. It was Guggenheim Exploration, on the other hand, that took upThompson's options on the rich Nevada Consolidated Copper Company.About three quarters of the original Guggenheim Exploration Companywas controlled by the Guggenheim family, the Whitney family (whoowned Metropolitan magazine, which employed the Bolshevik JohnReed), and John Ryan. In 1916 the Guggenheim interests reorganized

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into Guggenheim Brothers and brought in William C. Potter, who wasformerly with Guggenheim's American Smelting and Refining Company but who was in 1916 first' vice president of Guaranty Trust.

Extraordinary skill in raising capital for risky mining promotions earnedThompson a personal fortune and directorships in InspirationConsolidated Copper Company, Nevada Consolidated Copper Company, and Utah Copper Company — all major domestic copper  producers. Copper is, of course, a major material in the manufacture of munitions. Thompson was also director of the Chicago Rock Island &Pacific Railroad, the Magma Arizona Railroad and the Metropolitan LifeInsurance Company. And of particular interest for this book, Thompson

was "one of the heaviest stockholders in the Chase National Bank." Itwas Albert H. Wiggin, president of the Chase Bank, who pushedThompson for a post in the Federal Reserve System; and in 1914Thompson became the first full-term director of the Federal ReserveBank of New York — the most important bank in the Federal ReserveSystem.

By 1917, then, William Boyce Thompson was a financial operator of substantial means, demonstrated ability, with a flair for promotion and

implementation of capitalist projects, and with ready access to thecenters of political and financial power. This was the same man whofirst supported Aleksandr Kerensky, and who then became an ardentsupporter of the Bolsheviks, bequeathing a surviving symbol of thissupport — a laudatory pamphlet in Russian, "Pravda o Rossii iBol'shevikakh."2

Before leaving Russia in early December 1917 Thompson handed over the American Red Cross Mission to his deputy Raymond Robins. Robinsthen organized Russian revolutionaries to implement the Thompson planfor spreading Bolshevik propaganda in Europe (see Appendix 3). AFrench government document confirms this: "It appeared that ColonelRobins . . . was able to send a subversive mission of Russian bolsheviksto Germany to start a revolution there."3 This mission led to the abortive

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German Spartacist revolt of 1918. The overall plan also includedschemes for dropping Bolshevik literature by airplane or for smugglingit across German lines.

Thompson made preparations in late 1917 to leave Petrograd and sell theBolshevik Revolution to governments in Europe and to the U.S. Withthis in mind, Thompson cabled Thomas W. Lamont, a partner in theMorgan firm who was then in Paris with Colonel E. M. House. Lamontrecorded the receipt of this cablegram in his biography:

Just as the House Mission was completing its discussions in Paris inDecember 1917, I received an arresting cable from my old school and business friend, William Boyce Thompson, who was then in Petrogradin charge of the American Red Cross Mission there.4

Lamont journeyed to London and met with Thompson, who had leftPetrograd on December 5, traveled via Bergen, Norway, and arrived inLondon on December 10. The most important achievement of Thompson and Lamont in London was to convince the British War Cabinet — then decidedly anti-Bolshevik — that the Bolshevik regimehad come to stay, and that British policy should cease to be anti-

Bolshevik, should accept the new realities, and should support Lenin andTrotsky. Thompson and Lamont left London on December 18 andarrived in New York on December 25, 1917. They attempted the same process of conversion in the United States.

A CONSULTATION WITH LLOYD GEORGE

The secret British War Cabinet papers are now available and record the

argument used by Thompson to sell the British government on a pro-Bolshevik policy. The prime minister of Great Britain was David LloydGeorge. Lloyd George's private and political machinations rivaled thoseof a Tammany Hall politician — yet in his lifetime and for decades after, biographers were unable, or unwilling, to come to grips with them. In1970 Donald McCormick's The Mask of Merlin lifted the veil of secrecy.

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McCormick shows that by 1917 David Lloyd George had bogged "too

deeply in the mesh of international armaments intrigues to be a freeagent" and was beholden to Sir Basil Zaharoff, an internationalarmaments dealer, whose considerable fortune was made by selling arms

to both sides in several wars.5 Zaharoff wielded enormous behind-the-scenes power and, according to McCormick, was consulted on war  policies by the Allied leaders. On more than one occasion, reportsMcCormick, Woodrow Wilson, Lloyd George, and GeorgesClemenceau met in Zaharoff's Paris home. McCormick notes that"Allied statesmen and leaders were obliged to consult him before planning any great attack." British intelligence, according toMcCormick, "discovered documents which incriminated servants of the

Crown as secret agents of Sir Basil Zaharoff with the knowledge of  Lloyd George."6 In 1917 Zaharoff was linked to the Bolsheviks; hesought to divert munitions away from anti-Bolsheviks and had alreadyintervened in behalf of the Bolshevik regime in both London and Paris.

In late 1917, then — at the time Lamont and Thompson arrived inLondon — Prime Minister Lloyd George was indebted to powerfulinternational armaments interests that were allied to the Bolsheviks and providing assistance to extend Bolshevik power in Russia. The British

 prime minister who met with William Thompson in 1917 was not then afree agent; Lord Milner was the power behind the scenes and, as theepigraph to this chapter suggests, favorably inclined towards socialismand Karl Marx.

The "secret" War Cabinet papers give the "Prime Minister's account of aconversation with Mr. Thompson, an American returned from Russia,"7

and the report made by the prime minister to the War Cabinet after 

meeting with Thompson.8

The cabinet paper reads as follows:The Prime Minister reported a conversation he had had with a Mr.Thompson — an American traveller and a man of considerablemeans — who had just returned from Russia, and who had given asomewhat different impression of affairs in that country from what was

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generally believed. The gist of his remarks was to the effect that theRevolution had come to stay; that the Allies had not shown themselvessufficiently sympathetic with the Revolution; and that MM. Trotzki andLenin were not in German pay, the latter being a fairly distinguished

Professor. Mr. Thompson had added that he considered the Allies shouldconduct in Russia an active propaganda, carried out by some form of Allied Council composed o[ men especially selected [or the purpose;further, that on the whole, he considered, having regard to the character of the de facto Russian Government, the several Allied Governmentswere not suitably represented in Petrograd. In Mr. Thompson's opinion,it was necessary for the Allies to realise that the Russian army and people were out of the war, and that the Allies would have to choose

 between Russia as the friendly or a hostile neutral.

The question was discussed as to whether the Allies ought not to changetheir policy in regard to the de facto Russian Government, theBolsheviks being stated by Mr. Thompson to be and-German. In thisconnection Lord Robert Cecil drew attention to the conditions of thearmistice between the German and Russian armies, which provided,inter alia, for trading between the two countries, and for theestablishment of a Purchasing Commission in Odessa, the whole

arrangement being obviously dictated by the Germans. Lord RobertCecil expressed the view that the Germans would endeavour to continuethe armistice until the Russian army had melted away.

Sir Edward Carson read a communication, signed by M. Trotzki, whichhad been sent to him by a British subject, the manager of the Russian branch of the Vauxhall Motor Company, who had just returned fromRussia [Paper G.T. — 3040]. This report indicated that M. Trotzki's

 policy was, ostensibly at any rate, one of hostility to the organisation of civilised society rather than pro-German. On the other hand, it wassuggested that an assumed attitude of this kind was by no meansinconsistent with Trotzki's being a German agent, whose object was toruin Russia in order that Germany might do what she desired in thatcountry.

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After hearing Lloyd George's report and supporting arguments, the War Cabinet decided to go along with Thompson and the Bolsheviks. Milner had a former British consul in Russia — Bruce Lockhart — ready andwaiting in the wings. Lockhart was briefed and sent to Russia with

instructions to work informally with the Soviets.

The thoroughness of Thompson's work in London and the pressure hewas able to bring to bear on the situation are suggested by subsequentreports coming into the hands of the War Cabinet, from authenticsources. The reports provide a quite different view of Trotsky and theBolsheviks from that presented by Thompson, and yet they were ignored by the cabinet. In April 1918 General Jan Smuts reported to the War 

Cabinet his talk with General Nieffel, the head of the French MilitaryMission who had just returned from Russia:

Trotski (sic) . . . was a consummate scoundrel who may not be pro-German, but is thoroughly pro-Trotski and pro-revolutionary and cannotin any way be trusted. His influence is shown by the way he has come todominate Lockhart, Robins and the French representative. He [Nieffel]counsels great prudence in dealing with Trotski, who he admits is theonly really able man in Russia.9

Several months later Thomas D. Thacher, Wall Street lawyer andanother member of the American Red CrAss Mission to Russia, was inLondon. On April 13, 1918, Thacher wrote to the American ambassador in London to the effect that he had received a request from H. P.Davison, a Morgan partner, "to confer with Lord Northcliffe"concerning the situation in Russia and then to go on to Paris "for other conferences." Lord Northcliffe was ill and Thacher left with yet another Morgan partner, Dwight W. Morrow, a memorandum to be submitted to Northcliffe on his return to London.10 This memorandum not only madeexplicit suggestions about Russian policy that supported Thompson's position but even stated that "the fullest assistance should be given to theSoviet government in its efforts to organize a volunteer revolutionaryarmy." The four main proposals in this Thacher report are:

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First of all . . . the Allies should discourage Japanese intervention inSiberia.

In the second place, the fullest assistance should be given to the Soviet

Government in its efforts to organize a volunteer revolutionary army.

Thirdly, the Allied Governments should give their moral support to theRussian people in their efforts to work out their own political systemsfree from the domination of any foreign power ....

Fourthly, until the time when open conflict shall result between theGerman Government and the Soviet Government of Russia there will beopportunity for peaceful commercial penetration by German agencies in

Russia. So long as there is no open break, it will probably be impossibleto entirely prevent such commerce. Steps should, therefore, be taken toimpede, so far as possible, the transport of grain and raw materials toGermany from Russia.11

THOMPSON'S INTENTIONS AND OBJECTIVES

Why would a prominent Wall Street financier, and director of theFederal Reserve Bank, want to organize and assist Bolshevik revolutionaries? Why would not one but several Morgan partnersworking in concert want to encourage the formation of a Soviet"volunteer revolutionary army" — an army supposedly dedicated to theoverthrow of Wall Street, including Thompson, Thomas Lamont,Dwight Morrow, the Morgan firm, and all their associates?

Thompson at least was straightforward about his objectives in Russia: he

wanted to keep Russia at war with Germany (yet he argued before theBritish War Cabinet that Russia was out of the war anyway) and toretain Russia as a market for postwar American enterprise. TheDecember 1917 Thompson memorandum to Lloyd George describesthese aims.12 The memorandum begins, "The Russian situation is lostand Russia lies entirely open to unopposed German exploitation .... "and

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concludes, "I believe that intelligent and courageous work will still prevent Germany from occupying the field to itself and thus exploitingRussia at the expense of the Allies." Consequently, it was Germancommercial and industrial exploitation of Russia that Thompson feared

(this is also reflected in the Thacher memorandum) and that broughtThompson and his New York friends into an alliance with theBolsheviks. Moreover, this interpretation is reflected in a quasi-jocular statement made by Raymond Robins, Thompson's deputy, to BruceLockhart, the British agent:

You will hear it said that I am the representative of Wall Street; that I amthe servant of William B. Thompson to get Altai copper for him; that I

have already got 500,000 acres of the best timber land in Russia for myself; that I have already copped off the Trans-Siberian Railway; thatthey have given me a monopoly of the platinum of Russia; that thisexplains my working for the soviet .... You will hear that talk. Now, I donot think it is true, Commissioner, but let us assume it is true. Let usassume that I am here to capture Russia for Wall Street and American business men. Let us assume that you are a British wolf and I am anAmerican wolf, and that when this war is over we are going to eat eachother up for the Russian market; let us do so in perfectly frank, man

fashion, but let us assume at the same time that we are fairly intelligentwolves, and that we know that if we do not hunt together in this hour theGerman wolf will eat us both up, and then let us go to work.13

With this in mind let us take a look at Thompson's personal motivations.Thompson was a financier, a promoter, and, although without previousinterest in Russia, had personally financed the Red Cross Mission toRussia and used the mission as a vehicle for political maneuvering.

From the total picture we can deduce that Thompson's motives were primarily financial and commercial. Specifically, Thompson wasinterested in the Russian market, and how this market could beinfluenced, diverted; and captured for postwar exploitation by a WallStreet syndicate, or syndicates. Certainly Thompson viewed Germany asan enemy, but less a political enemy than an economic or a commercial

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enemy. German industry and German banking were the real enemy. Tooutwit Germany, Thompson was willing to place seed money on any political power vehicle that would achieve his objective. In other words,Thompson was an American imperialist fighting against German

imperialism, and this struggle was shrewdly recognized and exploited byLenin and Trotsky.

The evidence supports this apolitical approach. In early August 1917,William Boyce Thompson lunched at the U.S. Petrograd embassy withKerensky, Terestchenko, and the American ambassador Francis. Over lunch Thompson showed his Russian guests a cable he had just sent tothe New York office of J.P. Morgan requesting transfer of 425,000

rubles to cover a personal subscription to the new Russian Liberty Loan.Thompson also asked Morgan to "inform my friends I recommend these bonds as the best war investment I know. Will be glad to look after their  purchasing here without compensation"; he then offered personally totake up twenty percent of a New York syndicate buying five millionrubles of the Russian loan. Not unexpectedly, Kerensky andTerestchenko indicated "great gratification" at support from Wall Street.And Ambassador Francis by cable promptly informed the StateDepartment that the Red Cross commission was "working harmoniously

with me," and that it would have an "excellent effect."14 Other writershave recounted how Thompson attempted to convince the Russian peasants to support Kerensky by investing $1 million of his own moneyand U.S. government funds on the same order of magnitude in propaganda activities. Subsequently, the Committee on Civic Educationin Free Russia, headed by the revolutionary "Grandmother"Breshkovskaya, with David Soskice (Kerensky's private secretary) asexecutive, established newspapers, news bureaus, printing plants, and

speakers bureaus to promote the appeal — "Fight the kaiser and save therevolution." It is noteworthy that the Thompson-funded Kerenskycampaign had the same appeal — "Keep Russia in the war" — as had hisfinancial support of the Bolsheviks. The common link betweenThompson's support of Kerensky and his support of Trotsky and Lenin

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was — "continue the war against Germany" and keep Germany out of Russia.

In brief, behind and below the military, diplomatic, and political aspects

of World War I, there was another battle raging, namely, a maneuveringfor postwar world economic power by international operators withsignificant muscle and influence. Thompson was not a Bolshevik; hewas not even pro-Bolshevik. Neither was he pro-Kerensky. Nor was heeven pro-American. The overriding motivation was the capturing of the

 postwar Russian market. This was a commercial, not an ideological,objective. Ideology could sway revolutionary operators like Kerensky,Trotsky, Lenin et al., but not financiers.

The Lloyd George memorandum demonstrates Thompson's partiality for neither Kerensky nor the Bolsheviks: "After the overthrow of the lastKerensky government we materially aided the dissemination of theBolshevik literature, distributing it through agents and by aeroplanes tothe Germany army."15 This was written in mid-December 1917, onlyfive weeks after the start of the Bolshevik Revolution, and less than four months after Thompson expressed his support of Kerensky over lunch inthe American embassy.

THOMPSON RETURNS TO THE UNITED STATES

Thompson then returned and toured the United States with a public pleafor recognition of the Soviets. In a speech to the Rocky Mountain Clubof New York in January 1918, Thompson called for assistance for theemerging Bolshevik government and, appealing to an audiencecomposed largely of Westerners, evoked the spirit of the American

 pioneers:

These men would not have hesitated very long about extendingrecognition and giving the fullest help and sympathy to theworkingman's government of Russia, because in 1819 and the years

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Red Cross: "Please urge upon the President the necessity of our continued intercourse with the Bolshevik Government."22 On January23, 1918, Robins cabled Thompson, then in New York:

Soviet Government stronger today than ever before. Its authority and power greatly consolidated by dissolution of Constituent Assembly ....Cannot urge too strongly importance of prompt recognition of Bolshevik authority .... Sisson approves this text and requests you to show thiscable to Creel. Thacher and Wardwell concur.23

Later in 1918, on his return to the United States, Robins submitted areport to Secretary of State Robert Lansing containing this opening paragraph: "American economic cooperation with Russia; Russia willwelcome American assistance in economic reconstruction."24

Robins' persistent efforts in behalf of the Bolshevik cause gave him acertain prestige in the Bolshevik camp, and perhaps even some politicalinfluence. The U.S. embassy in London claimed in November 1918 that"Salkind owe[s] his appointment, as Bolshevik Ambassador toSwitzerland, to an American . . . no other than Mr. Raymond Robins."25

About this time reports began filtering into Washington that Robins was

himself a Bolshevik; for example, the following from Copenhagen,dated December 3, 1918:

Confidential. According to a statement made by Radek to George dePatpourrie, late Austria Hungarian Consul General at Moscow, ColonelRobbins [ sic], formerly thief of the American Red Cross Mission toRussia, is at present in Moscow negotiating with the Soviet Governmentand arts as the intermediary between the Bolsheviki and their friends inthe United States. The impression seems to be in some quarters that

Colonel Robbins is himself a Bolsheviki while others maintain that he isnot but that his activities in Russia have been contrary to the interest of Associated Governments.26

Materials in the files of the Soviet Bureau in New York, and seized bythe Lusk Committee in 1919, confirm that both Robins and his wife

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were closely associated with Bolshevik activities in the United Statesand with the formation of the Soviet Bureau in New York.27

The British government established unofficial relations with the

Bolshevik regime by sending to Russia a young Russian-speaking agent,Bruce Lockhart. Lockhart was, in effect, Robins' opposite number; butunlike Robins, Lockhart had direct channels to his Foreign Office.Lockhart was not selected by the foreign secretary or the Foreign Office; both were dismayed at the appointment. According to Richard Ullman,Lockhart was "selected for his mission by Milner and Lloyd Georgethemselves .... "Maxim Litvinov, acting as unofficial Sovietrepresentative in Great Britain, wrote for Lockhart a letter of 

introduction to Trotsky; in it he called the British agent "a thoroughlyhonest man who understands our position and sympathizes with us.28

We have already noted the pressures on Lloyd George to take a pro-Bolshevik position, especially those from William B. Thompson, andthose indirectly from Sir Basil Zaharoff and Lord Milner. Milner was, asthe epigraph to this chapter suggests, exceedingly prosocialist. EdwardCrankshaw has succinctly outlined Milner's duality.

Some of the passages [in Milner] on industry and society . . . are passages which any Socialist would be proud to have written. But theywere not written by a Socialist. They were written by "the man whomade the Boer War." Some of the passages on Imperialism and thewhite man's burden might have been written by a Tory diehard. Theywere written by the student of Karl Marx.29

According to Lockhart, the socialist bank director Milner was a manwho inspired in him "the greatest affection and hero-worship."30

Lockhart recounts how Milner personally sponsored his Russianappointment, pushed it to cabinet level, and after his appointment talked"almost daily" with Lockhart. While opening the way for recognition of the Bolsheviks, Milner also promoted financial support for their opponents in South Russia and elsewhere, as did Morgan in New York.This dual policy is consistent with the thesis that the modus operandi of 

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the politicized internationalists — such as Milner and Thompson — wasto place state money on any revolutionary or counterrevolutionary horsethat looked a possible winner. The internationalists, of course, claimedany subsequent benefits. The clue is perhaps in Bruce Lockhart's

observation that Milner was a man who "believed in the highlyorganized state."31

The French government appointed an even more openly Bolshevik sympathizer, Jacques Sadoul, an old friend of Trotsky.32

In sum, the Allied governments neutralized their own diplomaticrepresentatives in Petrograd and replaced them with unofficial agentsmore or less sympathetic to the Bolshevists.

The reports of these unofficial ambassadors were in direct contrast to pleas for help addressed to the West from inside Russia. Maxim Gorky protested the betrayal of revolutionary ideals by the Lenin-Trotskygroup, which had imposed the iron grip of a police state in Russia:

We Russians make up a people that has never yet worked in freedom,that has never yet had a chance to develop all its powers and its talents.

And when I think that the revolution gives us the possibility of freework, of a many-sided joy in creating, my heart is tilled with great hopeand joy, even in these cursed days that are besmirched with blood andalcohol.

There is where begins the line of my decided and irreconcilableseparation [tom the insane actions of the People's Commissaries. Iconsider Maximalism in ideas very useful for the boundless Russiansoul; its task is to develop in this soul great and bold needs, to call forth

the so necessary fighting spirit and activity, to promote initiative in thisindolent soul and to give it shape and life in general.

But the practical Maximalism of the Anarcho-Communists andvisionaries from the Smolny is ruinous for Russia and, above all, for theRussian working class. The People's Commissaries handle Russia like

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material for an experiment. The Russian people is for them what theHorse is for learned bacteriologists who inoculate the horse with typhusso that the anti-typhus lymph may develop in its blood. Now theCommissaries are trying such a predestined-to-failure experiment upon

the Russian people without thinking that the tormented, half-starvedhorse may die.

The reformers from the Smolny do not worry about Russia. They arecold-bloodedly sacrificing Russia in the name of their dream of theworldwide and European revolution. And just as long as I can, I shallimpress this upon the Russian proletarian: "Thou art being led todestruction} Thou art being used as material for an inhuman

experiment!"

33

Also in contrast to the reports of the sympathetic unofficial ambassadorswere the reports from the old-line diplomatic representatives. Typicalo[ many messages [lowing into Washington in early 1918 — particularlyafter Woodrow Wilson's expression of support for the Bolshevik governments — was the following cable [tom the U.S. legation in Bern,Switzerland:

For Polk. President's message to Consul Moscow not understood hereand people are asking why the President expresses support of Bolsheviki, in view of rapine, murder and anarchy of these bands.34

Continued support by the Wilson administration for the Bolsheviks ledto the resignation of De Witt C. Poole, the capable American charged'affaires in Archangel (Russia):

It is my duty to explain frankly to the department the perplexity into

which I have been thrown by the statement of Russian policy adopted bythe Peace Conference, January 22, on the motion of the President. Theannouncement very happily recognizes the revolution and confirmsagain that entire absence of sympathy for any form of counter revolutionwhich has always been a key note of American policy in Russia, but it

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contains not one [word] of condemnation for the other enemy of therevolution — the Bolshevik Government.35

Thus even in the early days of 1918 the betrayal of the libertarian

revolution had been noted by such acute observers as Maxim Gorky andDe Witt C. Poole. Poole's resignation shook the State Department, whichrequested the "utmost reticence regarding your desire to resign" andstated that "it will be necessary to replace you in a natural and normalmanner in order to prevent grave and perhaps disastrous effect upon themorale of American troops in the Archangel district which might lead toloss of American lives."36

So not only did Allied governments neutralize their own governmentrepresentatives but the U.S. ignored pleas from within and withoutRussia to cease support of the Bolsheviks. Influential support of theSoviets came heavily from the New York financial area (little effectivesupport emanated from domestic U.S. revolutionaries). In particular, itcame from American International Corporation, a Morgan-controlledfirm.

EXPORTING THE REVOLUTION: JACOB H. RUBIN

We are now in a position to compare two cases — not by any means theonly such cases — in which American citizens Jacob Rubin and RobertMinor assisted in exporting the revolution to Europe and other parts of Russia.

Jacob H. Rubin was a banker who, in his own words, "helped to formthe Soviet Government of Odessa."37 Rubin was president, treasurer, and

secretary of Rubin Brothers of 19 West 34 Street, New York City. In1917 he was associated with the Union Bank of Milwaukee and theProvident Loan Society of New York. The trustees of the ProvidentLoan Society included persons mentioned elsewhere as havingconnection with the Bolshevik Revolution: P. A. Rockefeller, Mortimer L. Schiff, and James Speyer.

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By some process — only vaguely recounted in his book  I Live to

Tell 38 — Rubin was in Odessa in February 1920 and became the subjectof a message from Admiral McCully to the State Department (datedFebruary 13, 1920, 861.00/6349). The message was to the effect that

Jacob H. Rubin of Union Bank, Milwaukee, was in Odessa and desiredto remain with the Bolshevists — "Rubin does not wish to leave, hasoffered his services to Bolsheviks and apparently sympathizes withthem." Rubin later found his way back to the U.S. and gave testimony before the House Committee on Foreign Affairs in 1921:

I had been with the American Red Cross people at Odessa. I was therewhen the Red Army took possession of Odessa. At that time I was

favorably inclined toward the Soviet Government, because I was asocialist and had been a member of that party for 20 years. I must admitthat to a certain extent I helped to form the Soviet Government of Odessa ....39

While adding that he had been arrested as a spy by the Denikingovernment of South Russia, we learn little more about Rubin. We do,however, know a great deal more about Robert Minor, who was caughtin the act and released by a mechanism reminiscent of Trotsky's release

from a Halifax prisoner-of-war camp.

EXPORTING THE REVOLUTION: ROBERT MINOR 

Bolshevik propaganda work in Germany,40 financed and organized byWilliam Boyce Thompson and Raymond Robins, was implemented inthe field by American citizens, under the supervision of Trotsky'sPeople's Commissariat for Foreign Affairs:

One of Trotsky's earliest innovations in the Foreign Office had been toinstitute a Press Bureau under Karl Radek and a Bureau of International Revolutionary Propaganda under Boris Reinstein, amongwhose assistants were John Reed and Albert Rhys Williams, and the full blast of these power-houses was turned against the Germany army.

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A German newspaper, Die Fackel (The Torch), was printed in editionsof half a million a day and sent by special train to Central ArmyCommittees in Minsk, Kiev, and other cities, which in turn distributedthem to other points along the front.41

Robert Minor was an operative in Reinstein's propaganda bureau.Minor's ancestors were prominent in early American history. GeneralSam Houston, first president of the Republic of Texas, was related toMinor's mother, Routez Houston. Other relatives were MildredWashington, aunt of George Washington, and General John Minor,campaign manager for Thomas Jefferson. Minor's father was a Virginialawyer who migrated to Texas. After hard years with few clients, he

 became a San Antonio judge.Robert Minor was a talented cartoonist and a socialist. He left Texas tocome East. Some of his contributions appeared in Masses, a pro-Bolshevik journal. In 1918 Minor was a cartoonist on the staff of the Philadelphia Public Ledger. Minor left New York in March 1918 toreport the Bolshevik Revolution. While in Russia Minor joinedReinstein's Bureau of International Revolutionary Propaganda (seediagram), along with Philip Price, correspondent of the Daily Herald 

and Manchester Guardian, and Jacques Sadoul, the unofficial Frenchambassador and friend of Trotsky.

Excellent data on the activities of Price, Minor, and Sadoul havesurvived in the form of a Scotland Yard (London) Secret Special Report, No. 4, entitled, "The Case of Philip Price and Robert Minor," as well asin reports in the files of the State Department, Washington, D.C.42

According to this Scotland Yard report, Philip Price was in Moscow inmid-1917, before the Bolshevik Revolution, and admitted, "I am up tomy neck in the Revolutionary movement." Between the revolution andabout the fall of 1918, Price worked with Robert Minor in theCommissariat for Foreign Affairs. 

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ORGANIZATION OF FOREIGN PROPAGANDA WORK IN 1918

PEOPLE'S COMMISSARIAT FOR 

FOREIGN AFFAIRS

(Trotsky)

PRESS BUREAU

(Radek)

BUREAU OF INTERNATIONALREVOLUTIONARY PROPAGANDA

(Reinstein)

Field

Operatives

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authorities in the Cologne area. Subsequently, the Spartacists wereconvicted on charges of conspiracy to cause mutiny and sedition amongAllied forces. Price was arrested but, like Minor, speedily liberated. Thishasty release was noted in the State Department:

Robert Minor has now been released, for reasons that are not quite clear,since the evidence against him appears to have been ample to secureconviction. The release will have an unfortunate effect, for Minor is believed to have been intimately connected with the IWW in America.46

The mechanism by which Robert Minor secured his release is recordedin the State Department files. The first relevant document, dated June12, 1919, is from the U.S. Paris embassy to the secretary of state inWashington, D.C., and marked URGENT AND CONFIDENTIAL.47 

The French Foreign Office informed the embassy that on June 8, RobertMinor, "an American correspondent," had been arrested in Paris andturned over to the general headquarters of the Third American Army inCoblenz. Papers found on Minor appear "to confirm the reportsfurnished on his activities. It would therefore seem to be established thatMinor has entered into relations in Paris with the avowed partisans of Bolshevism." The embassy regarded Minor as a "particularly dangerous

man." Inquiries were being made of the American military authorities;the embassy believed this to be a matter within the jurisdiction of themilitary alone, so that it contemplated no action although instructionswould be welcome.

On June 14, Judge R. B. Minor in San Antonio, Texas, telegraphedFrank L. Polk in the State Department:

Press reports detention my son Robert Minor in Paris for unknown

reasons. Please do all possible to protect him I refer to Senators fromTexas.

[sgd.] R. P. Minor, District Judge, San Antonio, Texas48

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Polk telegraphed Judge Minor that neither the State Department nor theWar Department had information on the detention of Robert Minor, andthat the case was now before the military authorities at Coblenz. Late onJune 13 the State Department received a "strictly confidential urgent"

message from Paris reporting a statement made by the Office of MilitaryIntelligence (Coblenz) in regard to the detention of Robert Minor:"Minor was arrested in Paris by French authorities upon request of British Military Intelligence and immediately turned over to Americanheadquarters at Coblenz."49 He was charged with writing anddisseminating Bolshevik revolutionary literature, which had been printedin Dusseldorf, amongst British and American troops in the areas theyoccupied. The military authorities intended to examine the charges

against Minor, and if substantiated, to try him by court-martial. If thecharges were not substantiated, it was their intention to turn Minor over to the British authorities, "who originally requested that the French handhim over to them."50 Judge Minor in Texas independently contactedMorris Sheppard, U.S. senator from Texas, and Sheppard contactedColonel House in Paris. On June 17, 1919, Colonel House sent thefollowing to Senator Sheppard:

Both the American Ambassador and I are following Robert Minor's

case. Am informed that he is detained by American Military authoritiesat Cologne on serious charges, the exact nature of which it is difficult todiscover. Nevertheless, we will take every possible step to insure justconsideration for him.51

Both Senator Sheppard and Congressman Carlos Bee (14th District,Texas) made their interest known to the State Department. On June 27,1919, Congressman Bee requested facilities so that Judge Minor could

send his son $350 and a message. On July 3 Senator Sheppard wroteFrank Polk, stating that he was "very much interested" in the RobertMinor case, and wondering whether State could ascertain its status, andwhether Minor was properly under the jurisdiction of the militaryauthorities. Then on July 8 the Paris embassy cabled Washington:"Confidential. Minor released by American authorities . . . returning to

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 by Thompson's own memorandum (see Appendix 3). Was not thereforeThompson (and Robins), to some degree, subject to the same charges?

After interviewing Siegfried, the witness against Minor, and reviewing

the evidence, Bethel commented:

I thoroughly believe Minor to be guilty, but if I was sitting in court, Iwould not put guilty on the evidence now available — the testimony of one man only and that man acting in the character of a detective andinformer.

Bethel goes on to state that it would be known within a week or ten dayswhether substantial corroboration of Siegfried's testimony was available.

If available, "I think Minor should be tried," but "if corroboration cannot be had, I think it would be better to dismiss the case."

This statement by Bethel was relayed in a different form by GeneralHarbord in a telegram of July 5 to General Malin Craig (Chief of Staff,Third Army, Coblenz):

With reference to the case against Minor, unless other witnesses thanSiegfried have been located by this time C in C directs the case bedropped and Minor liberated. Please acknowledge and state action.

The reply from Craig to General Harbord (July 5) records that Minor was liberated in Paris and adds, "This is in accordance with his ownwishes and suits our purposes." Craig also adds that other witnesses had 

 been obtained.

This exchange of telegrams suggests a degree of haste in dropping the

charges against Robert Minor, and haste suggests pressure. There was nosignificant attempt made to develop evidence. Intervention by ColonelHouse and General Pershing at the highest levels in Paris and thecablegram from Colonel House to Senator Morris Sheppard give weightto American newspaper reports that both House and President Wilsonwere responsible for Minor's hasty release without trial.54

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Minor returned to the United States and, like Thompson and Robins before him, toured the U.S. promoting the wonders of Bolshevik Russia.

By way of summary, we find that Federal Reserve Bank director 

William Thompson was active in promoting Bolshevik interests inseveral ways — production of a pamphlet in Russian, financingBolshevik operations, speeches, organizing (with Robins) a Bolshevik revolutionary mission to Germany (and perhaps France), and withMorgan partner Lamont influencing Lloyd George and the British War Cabinet to effect a change in British policy. Further, Raymond Robinswas cited by the French government for organizing Russian Bolsheviksfor the German revolution. We know that Robins was undisguisedly

working for Soviet interests in Russia and the United States. Finally, wefind that Robert Minor, one of the revolutionary propagandists used inThompson's program, was released under circumstances suggestingintervention from the highest levels of the U.S. government.

Obviously, this is but a fraction of a much wider picture. These arehardly accidental or random events. They constitute a coherent,continuing pattern over several years. They suggest powerful influenceat the summit levels of several governments.

Footnotes:

1For a biography see Hermann Hagedorn, The Magnate: William Boyce

Thompson and His Time (1869-1930) (New York: Reynal & Hitchcock,1935).

2

Polkovnik' Villiam' Boic' Thompson', "Pravda o Rossii i Bol'shevikakh"(New York: Russian-American Publication Society, 1918).

3John Bradley, Allied Intervention in Russia (London: Weidenfeld and Nicolson, 1968.)

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4Thomas W. Lamont, Across World Frontiers (New York: Harcourt,Brace, 1959), p. 85. See also pp. 94-97 for massive breastbeating over the failure of President Wilson to act promptly to befriend the Sovietregime. Corliss Lamont, his son, became a [font-line domestic leftist in

the U.S.5Donald McCormick, The Mask of Merlin (London: MacDonald, 1963; New York: Holt, Rinehart and Winston, 1964), p. 208. Lloyd George's personal life would certainly leave him open to blackmail.

6Ibid. McCormick's italics.

7British War Cabinet papers, no. 302, sec. 2 (Public Records Office,

London).8The written memorandum that Thompson submitted to Lloyd Georgeand that became the basis for the War Cabinet statement is availablefrom U.S. archival sources and is printed in full in Appendix 3.

9War Cabinet papers, 24/49/7197 (G.T. 4322) Secret, April 24, 1918.

10Letter reproduced in full in Appendix 3. It should be noted that we

have identified Thomas Lamont, Dwight Morrow, and H. P. Davison as being closely involved in developing policy towards the Bolsheviks. Allwere partners in the J.P. Morgan firm. Thacher was with the law firmSimpson, Thacher & Bartlett and was a close friend of Felix Frankfurter.

11Complete memorandum is in U.S. State Dept. Decimal File, 316-13-698.

12See Appendix 3.

13U.S., Senate, Bolshevik Propaganda, Hearings before a Subcommitteeof the Committee on the Judiciary, 65th Cong., t919, p. 802.

14U.S. State Dept. Decimal File, 861.51/184.

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15See Appendix 3.

16Inserted by Senator Calder into the Congressional Record, January 31,1918, p. 1409.

17Hagedorn, op. tit., p. 263.

18U.S. State Dept. Decimal File, 861.00/3005.

19Louis Ware, George Foster Peabody (Athens: University of GeorgiaPress, 1951).

20Seep. 16.

21If this argument seems too farfetched, the reader should see GabrielKolko, Railroads and Regulation 1877-1916 (New York: W. W. Norton,1965), which describes how pressures for government control andformation of the Interstate Commerce Commission came from therailroad owners, not from farmers and users of railroad services.

22C. K. Cumming and Waller W. Pettit, Russian-American Relations,

 Documents and Papers (New York: Harcourt, Brace & Howe, 1920),

doe. 44.23Ibid., doc. 54.

24Ibid., doc. 92.

25U.S. State Dept. Decimal File, 861.00/3449. But see Kennan, Russia

 Leaves the War, pp. 401-5.

26

Ibid., 861.00 3333.27See chapter seven.

28Richard H. Ullman, Intervention and the War (Princeton, N.J.:Princeton University Press, 1961), t). 61.

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29Edward Crankshaw, The Forsaken Idea: A Study o! Viscount Milner 

(London: Longmans Green, 1952), p. 269.

30Robert Hamilton Bruce Lockhart, British Agent (New York: Putnam's,

1933), p. 119.31Ibid., p. 204.

32See Jacques Sadoul, Notes sur la revolution bolchevique (Paris:Editions de la sirene, 1919).

34U.S. State Dept. Decimal File, 861.00/1305, March 15, 1918.

35

Ibid., 861.00/3804.36Ibid.

37U.S., House, Committee on Foreign Affairs, Conditions in Russia, 66thCong., 3d sess., 1921.

38Jacob H. Rubin, 1 Live to Tell: The Russian Adventures o! an

 American Socialist (Indianapolis: Bobbs-Merrill, 1934).

39U.S., House, Committee on Foreign Affairs, op. cit.

40See George G. Bruntz, Allied Propaganda and the Collapse o! the

German Empire in 1918 (Stanford, Calif.: Stanford University Press,1938), pp. 144-55; see also herein p. 82.

41John W. Wheeler-Bennett, The Forgotten Peace (New York: WilliamMorrow, 1939).

42There is a copy of this Scotland Yard report in U.S. Start' Dept.Decimal File, 316-23-1184 9.

43Joseph North, Robert Minor: Artist and Crusader (New York:International Publishers, 1956).

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44Samples of Minor's propaganda tracts are still in the U.S. State Dept.files. See p. 197-200 on Thompson.

45See Appendix 3.

46U.S. State Dept. Decimal File, 316-23-1184.

47Ibid., 861.00/4680 (316-22-0774).

48Ibid., 861.00/4685 (/783).

49U.S. State Dept. Decimal File, 861.00/4688 (/788).

50Ibid.

51Ibid., 316-33-0824.

52U.S. State Dept. Decimal File, 861.00/4874.

53Office of Chief of Staff, U.S. Army, National Archives, Washington,D.C.

54U.S., Senate, Congressional Record, October 1919, pp. 6430, 6664-66,

7353-54; and New York Times, October It, 1919. See also Sacramento Bee, July 17, 1919.

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Chapter VI

THE BOLSHEVIKS RETURN TO NEW YORK 

Martens is very much in the limelight. There appears to be no doubt

about his connection with the Guarantee [ sic] Trust Company,

Though it is surprising that so large and influential an enterprise

should have dealings with a Bolshevik concern. 

Scotland Yard Intelligence Report, London, 19191

Following on the initial successes of the revolution, the Soviets wastedlittle time in attempting through former U.S. residents to establishdiplomatic relations with and propaganda outlets in the United States. InJune 1918 the American consul in Harbin cabled Washington:

Albert R. Williams, bearer Department passport 52,913 May 15, 1917 proceeding United States to establish information bureau for SovietGovernment for which he has written authority. Shall I visa?2

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Washington denied the visa and so Williams was unsuccessful in hisattempt to establish an information bureau here. Williams was followed by Alexander Nyberg (alias Santeri Nuorteva), a former Finnishimmigrant to the United States in January 1912, who became the first

operative Soviet representative in the United States. Nyberg was anactivtive propagandist. In fact, in 1919 be was, according to J. Edgar Hoover (in a letter to the U.S. Committee on Foreign Affairs), "theforerunner of LCAK Martens anti with Gregory Weinstein the mostactive individual of official Bolshevik propaganda in the United States."3

 Nyberg was none too successful as a diplomatic representative or,ultimately, as a propagandist. The State Departmment files record an

interview with Nyberg by the counselors' office, dated January 29, 1919. Nyberg was accompanied by H. Kellogg, described as "an Americancitizen, graduate of Harvard," and, more surprisingly, by a Mr.McFarland, an attorney for the Hearst organization. The StateDepartment records show that Nyberg made "many misstatements inregard to the attitude to the Bolshevik Government" and claimed thatPeters, the Lett terrorist police chief in Petrograd, was merely a "kind-hearted poet." Nyberg requested the department to cable Lenin, "on thetheory that it might be helpful in bringing about the conference proposed

 by the Allies at Paris."4 The proposed message, a rambling appeal toLenin to gain international acceptance appearing at the ParisConference, was not sent.5

A RAID ON THE SOVIET BUREAU IN NEW YORK 

Alexander Nyberg (Nuorteva) was then let go and replaced by the SovietBureau, which was established in early 1919 in the World Tower Building, 110 West 40 Street, New York City. The bureau was headed by a German citizen, Ludwig C. A. K. Martens, who is usually billed asthe first ambassador of the Soviet Union in the United States, and who,up to that time, had been vice president of Weinberg & Posner, anengineering firm located at 120 Broadway, New York City. Why the

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"ambassador" and his offices were located in New York rather than inWashington, D.C. was not explained; it does suggest that trade rather than diplomacy was its primary objective. In any event, the bureau promptly issued a call lot Russian trade with the United States. Industry

had collapsed and Russia direly needed machinery, railway goods,clothing, chemicals, drugs — indeed, everything utilized by a moderncivilization. In exchange the Soviets offered gold and raw materials. TheSoviet Bureau then proceeded to arrange contracts with American firms,ignoring the facts of the embargo and nonrecognition. At the same timeit was providing financial support for the emerging Communist PartyU.S.A.6

On May 7, 1919, the State Department slapped down businessintervention in behalf of the bureau (noted elsewhere),7 and repudiatedLudwig Martens, the Soviet Bureau, and the Bolshevik government o1Russia. This official rebuttal did not deter the eager order-hunters inAmerican industry. When the Soviet Bureau offices were raided on June12, 1919, by representatives of the Lusk Committee of the state of NewYork, files of letters to and from American businessmen, representingalmost a thousand firms, were unearthed. The British Home OfficeDirectorate of Intelligence "Special Report No. 5 (Secret)," issued from

Scotland Yard, London, July 14, 1919, and written by Basil H.Thompson, was based on this seized material; the report noted:

. . . Every effort was made from the first by Martens and his associatesto arouse the interest of American capitalists and there are grounds tot believing that the Bureau has received financial support from someRussian export firms, as well as from the Guarantee [ sic] TrustCompany, although this firm has denied the allegation that it is financing

Martens' organisation.8

It was noted by Thompson that the monthly rent of the Soviet Bureauoffices was $300 and the office salaries came to about $4,000. Martens'funds to pay these bills came partly from Soviet couriers — such as JohnReed and Michael Gruzenberg — who brought diamonds from Russia

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for sale in the U.S., and partly from American business firms, includingthe Guaranty Trust Company of New York. The British reportssummarized the files seized by the Lusk investigators from the bureauoffices, and this summary is worth quoting in full:

(1) There was an intrigue afoot about the time the President first went toFrance to get the Administration to use Nuorteva as an intermediary withthe Russian Soviet Government, with a view to bring about itsrecognition by America. Endeavour was made to bring Colonel Houseinto it, and there is a long and interesting letter to Frederick C. Howe, onwhose support and sympathy Nuorteva appeared to rely. There are other records connecting Howe with Martens and Nuorteva.

(2) There is a file of correspondence with Eugene Debs.

(3) A letter from Amos Pinchot to William Kent of the U.S. Tariff Commission in an envelope addressed to Senator Lenroot, introducesEvans Clark "now in the Bureau of the Russian Soviet Republic." "Hewants to talk to you about the recognition of Kolchak and the raising of the blockade, etc."

(4) A report to Felix Frankfurter, dated 27th May, 1919 speaks of thevirulent campaign vilifying the Russian Government.

(5) There is considerable correspondence between a Colonel and Mrs.Raymond Robbins [sic] and Nuorteva, both in 1918 and 1919. In July1918 Mrs. Robbins asked Nuorteva for articles for "Life and Labour,"the organ of the National Women's Trade League. In February andMarch, 1919, Nuorteva tried, through Robbins, to get invited to giveevidence before the Overman Committee. He also wanted Robbins to

denounce the Sisson documents.

(6) In a letter from the Jansen Cloth Products Company, New York, to Nuorteva, dated March 30th, 1918, E. Werner Knudsen says that heunderstands that Nuorteva intends to make arrangements for the exportof food-stuffs through Finland and he offers his services. We have a file

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on Knudsen, who passed information to and from Germany by way of Mexico with regard to British shipping.9

Ludwig Martens, the intelligence report continued, was in touch with all

the leaders of "the left" in the United States, including John Reed,Ludwig Lore, and Harry J. Boland, the Irish rebel. A vigorous campaignagainst Aleksandr Kolchak in Siberia had been organized by Martens.The report concludes:

[Martens'] organization is a powerful weapon for supporting theBolshevik cause in the United States and... he is in close touch with the promoters of political unrest throughout the whole American continent.

The Scotland Yard list of personnel employed by the Soviet Bureau in New York coincides quite closely with a similar list in the Lusk Committee files in Albany, New York, which are today open for publicinspection.10 There is one essential difference between the two lists: theBritish analysis included the name "Julius Hammer" whereas Hammer was omitted from the Lusk Committee report.11 The British reportcharacterizes Julius Hammer as follows:

In Julius Hammer, Martens has a real Bolshevik and ardent Left Wingadherent, who came not long ago from Russia. He was one of theorganizers of the Left Wing movement in New York, and speaks atmeetings on the same platform with such Left Wing leaders as Reed,Hourwich, Lore and Larkin.

There also exists other evidence of Hammer's work in behalf of theSoviets. A letter from National City Bank, New York, to the U.S.Treasury Department stated that documents received by the bank from

Martens were "witnessed by a Dr. Julius Hammer for the ActingDirector of the Financial Department" of the Soviet Bureau.12

The Hammer family has had close ties with Russia and the Sovietregime from 1917 to the present. Armand Hammer is today able toacquire the most lucrative of Soviet contracts. Jacob, grandfather of 

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Armand Hammer, and Julius were born in Russia. Armand, Harry, andVictor, sons of Julius, were born in the United States and are U.S.citizens. Victor was a well-known artist; his son — also namedArmand — and granddaughter are Soviet citizens and reside in the

Soviet Union. Armand Hammer is chairman of Occidental PetroleumCorporation and has a son, Julian, who is director of advertising and publications for Occidental Petroleum.

Julius Hammer was a prominent member and financier of the left wingof the Socialist Party. At its 1919 convention Hammer served withBertram D. Wolfe and Benjamin Gitlow on the steering committee thatgave birth to the Communist Party of the U.S.

In 1920 Julius Hammer was given a sentence of three-and-one-half tofifteen years in Sing Sing for criminal abortion. Lenin suggested — with justification — that Julius was "imprisoned on the charge of practicingillegal abortions but in fact because of communism."13 Other U.S.Communist Party members were sentenced to jail for sedition or deported to the Soviet Union. Soviet representatives in the United Statesmade strenuous but unsuccessful efforts to have Julius and his fellow party members released.

Another prominent member of the Soviet Bureau was the assistantsecretary, Kenneth Durant, a former aide to Colonel House. In 1920Durant was identified as a Soviet courier. Appendix 3 reproduces a letter to Kenneth Durant that was seized by the U.S. Department of Justice in1920 and that describes Durant's close relationship with the Soviethierarchy. It was inserted into the record of a House committee'shearings in 1920, with the following commentary:

MR. NEWTON: It is a mailer of interest to this committee to know whatwas the nature of that letter, and I have a copy of the letter that I Wantinserted in the record in connection with the witness' testimony. MR.Mason: That letter has never been shown to the witness. He said that henever saw the letter, and had asked to see it, and that the department had

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refused to show it to him. We would not put any witness on the standand ask him to testify to a letter without seeing it.

MR. NEWTON: The witness testified that he has such a letter, and he

testified that they found it in his coat in the trunk, I believe. That letter was addressed to a Mr. Kenneth Durant, and that letter had within itanother envelope which was likewise sealed. They were opened by theGovernment officials and a photostatic copy made. The letter, I may say,is signed by a man by the name of "Bill." It refers specifically to sovietmoneys on deposit in Christiania, Norway, a portion of which they waistturned over here to officials of the soviet government in this country.14

Kenneth Durant, who acted as Soviet courier in the transfer of funds,was treasurer lot the Soviet Bureau and press secretary and publisher of Soviet Russia, the official organ of the Soviet Bureau. Durant came froma well-to-do Philadelphia family. He spent most of his life in the serviceof the Soviets, first in charge of publicity work at the Soviet Bureau thenfrom 1923 to 1944 as manager of the Soviet Tass bureau in the UnitedStates. J. Edgar Hoover described Durant as "at all times . . . particularlyactive in the interests of Martens and of the Soviet government."15

Felix Frankfurter — later justice of the Supreme Courts — was also prominent in the Soviet Bureau files. A letter from Frankfurter to Sovietagent Nuorteva is reproduced in Appendix 3 and suggests thatFrankfurter had some influence with the bureau.

In brief, the Soviet Bureau could not have been established withoutinfluential assistance from within the United States. Part of thisassistance came from specific influential appointments to the SovietBureau staff and part came from business firms outside the bureau, firms

that were reluctant to make their support publicly known.

CORPORATE ALLIES FOR THE SOVIET BUREAU

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On February 1, 1920, the front page of the New York Times carried a boxed notation stating that Martens was to be arrested and deported toRussia. At the same time Martens was being sought as a witness toappear before a subcommittee of the Senate Foreign Relations

Committee investigating Soviet activity in the United States. After lyinglow for a few days Martens appeared before the committee, claimeddiplomatic privilege, and refused to give up "official" papers in his possession. Then after a flurry of publicity, Martens "relented," handedover his papers, and admitted to revolutionary activities in the UnitedStates with the ultimate aim of overthrowing the capitalist system.

Martens boasted to the news media and Congress that big corporations,

the Chicago packers among them, were aiding the Soviets:Affording to Martens, instead of farthing on propaganda among theradicals and the proletariat he has addressed most of his efforts towinning to the side of Russia the big business and manufacturinginterests of this country, the packers, the United States SteelCorporation, the Standard Oil Company and other big concerns engagedin international trade. Martens asserted that most of the big businesshouses of the country were aiding him in his effort to get the government

to recognize the Soviet government.16

This claim was expanded by A. A. Heller, commercial attache at theSoviet Bureau:

"Among the people helping us to get recognition from the StateDepartment are the big Chit ago packers, Armour, Swift, Nelson Morrisand Cudahy ..... Among the other firms are . . . the American SteelExport Company, the Lehigh Machine Company, the Adrian Knitting

Company, the International Harvester Company, the Aluminum GoodsManufacturing Company, the Aluminum Company of America, theAmerican Car and Foundry Export Company, M.C.D. Borden &Sons."17

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The New York Times followed up these claims and reported commentsof the firms named. "I have never heard of this man [Martens] before inmy life," declared G. F. Swift, Jr., in charge of the export department of Swift & Co. "Most certainly I am sure that we have never had any

dealings with him of any kind."18 The Times added that O. H. Swift, theonly other member of the firm that could be contacted, "also denied anyknowledge whatever of Martens or his bureau in New York." The Swiftstatement was evasive at best. When the Lusk Committee investigatorsseized the Soviet Bureau files, they found correspondence between the bureau and almost all the firms named by Martens and Heller. The "listof firms that offered to do business with Russian Soviet Bureau,"compiled from these files, included an entry (page 16), "Swift and

Company, Union Stock Yards, Chicago, Ill." In other words, Swift had  been in communication with Martens despite its denial to the New York 

Times.

The New York Times contacted United States Steel and reported, "JudgeElbert H. Gary said last night that there was no foundation for thestatement with the Soviet representative here had had any dealings withthe United States Steel Corporation." This is technically correct. TheUnited States Steel Corporation is not listed in the Soviet files, but the

list does contain (page 16) an affiliate, "United States Steel ProductsCo., 30 Church Street, New York City."

The Lusk Committee list records the following about other firmsmentioned by Martens and Heller: Standard Oil — not listed. Armour 8cCo., meatpackers — listed as "Armour Leather" and "Armour & Co.Union Stock Yards, Chicago." Morris Go., meatpackers, is listed on page 13. Cudahy — listed on page 6. American Steel Export Co. — 

listed on page 2 as located at the Woolworth Building; it had offered totrade with the USSR. Lehigh Machine Co. — not listed. Adrian KnittingCo. — listed on page 1. International Harvester Co. — listed on page 11.Aluminum Goods Manufacturing Co. — listed on page 1. AluminumCompany of America — not listed. American Car and FoundryExport — the closest listing is "American Car Co. — Philadelphia."

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M.C.D. Borden 8c Sons — listed as located at 90 Worth Street, on page4.

Then on Saturday, June 21, 1919, Santeri Nuorteva (Alexander Nyberg)

confirmed in a press interview the role of International Harvester:

Q: [by New York T imes reporter]: What is your business?

A: Purchasing director tot Soviet Russia.

Q: What did you do to accomplish this?

A: Addressed myself to American manufacturers.

Q: Name them.

A: International Harvester Corporation is among them.

Q: Whom did you see?

A: Mr. Koenig.

Q: Did you go to see him?

A: Yes.

Q: Give more names.

A: I went to see so many, about 500 people and I can't remember all thenames. We have files in the office disclosing them.19

In brief, the claims by Heller and Martens relating to their widespread

contacts among certain U.S. firms20

were substantiated by the office filesof the Soviet Bureau. On the other hand, for their own good reasons,these firms appeared unwilling to confirm their activities.

EUROPEAN BANKERS AID THE BOLSHEVIKS

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In addition to Guaranty Trust and the private banker Boissevain in NewYork, some European bankers gave direct help to maintain and expandthe Bolshevik hold on Russia. A 1918 State Department report from our Stockholm embassy details these financial transfers. The department

commended its author, stating that his "re ports on conditions in Russia,the spread of Bolshevism in Europe, and financial questions . . . have proved most helpful to the Department. Department is much gratified byyour capable handling of the legation's business."21 According to thisreport, one of these "Bolshevik bankers" acting in behalf of the emergingSoviet regime was Dmitri Rubenstein, of the former Russo-French bank in Petrograd. Rubenstein, an associate of the notorious Grigori Rasputin,had been jailed in prerevolutionary Petrograd in connection with the sale

of the Second Russian Life Insurance Company. The American manager and director of the Second Russian Life Insurance Company was JohnMacGregor Grant, who was located at 120 Broadway, New York City.Grant was also the New York representative of Putiloff's Banque Russo-Asiatique. In August 1918 Grant was (for unknown reasons) listed onthe Military Intelligence Bureau "suspect list."22 This may have occurred because Olof Aschberg in early 1918 reported opening a foreign creditin Petrograd "with the John MacGregor Grant Co., export concern,which it [Aschberg] finances in Sweden and which is financed inAmerica by the Guarantee [sic] Trust Co."23 After the revolution DmitriRubenstein moved to Stockholm and became financial agent for theBolsheviks. The State Department noted that while Rubenstein was "nota Bolshevik, he has been unscrupulous in moneT' making, and it issuspected that he may be making the contemplated visit to America inBolshevik interest and for Bolshevik pay.24

Another Stockholm "Bolshevik banker" was Abram Givatovzo, brother-

in-law of Trotsky and Lev Kamenev. The State Department reportasserted that while Givatovzo pretended to be "very anti-Bolshevik," hehad in fact received "large sums" of moneT' from the Bolsheviks bycourier for financing revolutionary operations. Givatovzo was part of asyndicate that included Denisoff of the former Siberian bank, Kamenkaof the Asoff Don Bank, and Davidoff of the Bank of Foreign Commerce.

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This syndicate sold the assets of the former Siberian Bank to the Britishgovernment.

Yet another tsarist private banker, Gregory Lessine, handled Bolshevik 

 business through the firm of Dardel and Hagborg. Other "Bolshevik  bankers" named in the report are stirrer and Jakob Berline, who previously controlled, through his wife, the Petrograd Nelkens Bank.Isidor Kon was used by these bankers as an agent.

The most interesting of these Europe-based bankers operating in behalf of the Bolsheviks was Gregory Benenson, formerly chairman inPetrograd of the Russian and English Bank — a bank which included onits board of directors Lord Balfour (secretary of state for foreign affairsin England) and Sir I. M. H. Amory, as well as S. H. Cripps and H.Guedalla. Benenson traveled to Petrograd after the revolution, then on toStockholm. He came. said one State Department official, "bringing tomy knowledge ten million rubles with him as he offered them to me at ahigh price for the use of our Embassy Archangel." Benenson had anarrangement with the Bolsheviks to exchange sixty million rubles for £1.5 million sterling.

In January 1919 the private bankers in Copenhagen that were associatedwith Bolshevik institutions became alarmed by rumors that the Danish political police had marked the Soviet legation and those persons incontact with the Bolsheviks for expulsion from Denmark. These bankersand the legation hastily attempted to remove their funds from Danish banks — in particular, seven million rubles from the Revisionsbanken.25 

Also, confidential documents were hidden in the offices of the MartinLarsen Insurance Company.

Consequently, we can identify a pattern of assistance by capitalist bankers for the Soviet Union. Some of these were American bankers,some were tsarist bankers who were exiled and living in Europe, andsome were European bankers. Their common objective was profit, notideology.

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The questionable aspects of the work of these "Bolshevik bankers," asthey were called, arises from the framework of contemporary events inRussia. In 1919 French, British, and American troops were fightingSoviet troops in the Archangel region. In one clash in April 1919, for 

example, American casualties were one officer, .five men killed, andnine missing.26 Indeed, at one point in 1919 General Tasker H. Bliss, theU.S. commander in Archangel, affirmed the British statement that"Allied troops in the Murmansk and Archangel districts were in danger of extermination unless they were speedily reinforced."27

Reinforcements were then on the way under the command of Brigadier General W. P. Richardson.

In brief, while Guaranty Trust and first-rank American firms wereassisting the formation of the Soviet Bureau in New York, Americantroops were in conflict with Soviet troops in North Russia. Moreover,these conflicts were daily reported in the New York Times, presumablyread by these bankers and businessmen. Further, as we shall see inchapter ten, the financial circles that were supporting the Soviet Bureauin New York also formed in New York the "United Americans" — avirulently anti-Communist organization predicting bloody revolution,mass starvation, and panic in the streets of New York.

Footnotes:

1Copy in U.S. State Dept. Decimal File, 316-22-656.

2Ibid., 861.00/1970.

3

U.S., House, Committee on Foreign Affairs, Conditions in Russia, 66thCong., 3d sess., 1921, p. 78.

4U.S. State Dept. Decimal File, 316-19-1120.

5Ibid.

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6See Benjamin Gitlow, [U.S., House, Un-American Propaganda

 Activities (Washington, 1939), vols. 7-8, p. 4539.

7See p. 119.

8Copy in [U.S. State Dept. Decimal File, 316-22-656. Confirmation of Guaranty Trust involvement tomes in later intelligence reports.

9On Frederick C. Howe see pp. 16, 177, for an early statement of themanner in which financiers use society and its problems for their ownends; on Felix Frankfurter, later Supreme Court justice, see Appendix 3for an early Frankfurter letter to Nuorteva; on Raymond Robins see p.100.

10The Lusk Committee list of personnel in the Soviet Bureau is printed inAppendix 3. The list includes Kenneth Durant, aide to Colonel House;Dudley Field Malone, appointed by President Wilson as collector of customs for the Port of New York; and Morris Hillquit, the financialintermediary between New York banker Eugene Boissevain on the onehand, and John Reed and Soviet agent Michael Gruzenberg on the other.

11Julius Hammer was the father of Armand Hammer, who today ischairman of the Occidental Petroleum Corp. of Los Angeles.

12See Appendix 3.

13V. I. Lenin, Polnoe Sobranie Sochinenii, 5th ed. (Moscow, 1958),53:267.

14U.S., House, Committee. on Foreign Affairs, Conditions in Russia,

66th Cong., 3d sess., 1921, p. 75. "Bill" was William Bobroff, Sovietagent.

15Ibid., p. 78.

16 New York Times, November 17, 1919.

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17Ibid.

18Ibid.

19

 New York Times, June 21, 1919.20See p. 119.

21U.S. State Dept. Decimal File, 861.51/411, November 23, 1918.

22Ibid., 316-125-1212.

23U.S., Department of State, Foreign Relations o! the United States:

1918, Russia, 1:373.

24U.S. State Dept. Decimal File, 861.00/4878, July,' 21, 1919.

25Ibid., 316-21-115/21.

26 New York Times, April 5, 1919.

27Ibid.

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Chapter VIII

120 BROADWAY, NEW YORK CITY

William B. Thompson, who was in Petrograd from July until

November last, has made a personal contribution of $1,000,000 to

the Bolsheviki for the purpose of spreading their doctrine in

Germany and Austria ....

Washington Post, February 2, 1918

While collecting material for this book a single location and address inthe Wall Street area came to the fore — 120 Broadway, New York City.Conceivably, this book could have been written incorporating only persons, firms, and organizations located at 120 Broadway in the year 1917. Although this research method would have been forced and

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unnatural, it would have excluded only a relatively small segment of thestory.

The original building at 120 Broadway was destroyed by fire before

World War I. Subsequently the site was sold to the Equitable OfficeBuilding Corporation, organized by General T. Coleman du Pont, president of du Pont de Nemours Powder Company.1 A new buildingwas completed in 1915 and the Equitable Life Assurance Companymoved back to its old site.2 In passing we should note an interestinginterlock in Equitable history. In 1916 the cashier of the Berlin EquitableLife office was William Schacht, the father of Hjalmar Horace GreeleySchacht — later to become Hitler's banker, and financial genie. William

Schacht was an American citizen, worked thirty years for Equitable inGermany, and owned a Berlin house known as "Equitable Villa." Before joining Hitler, young Hjalmar Schacht served as a member of theWorkers and Soldiers Council (a soviet) of Zehlendoff; this he left in1918 to join the board of the Nationalbank fur Deutschland. Hiscodirector at DONAT was Emil Wittenberg, who, with Max May of Guaranty Trust Company of New York, was a director of the first Sovietinternational bank , Ruskombank.

In any event, the building at 120 Broadway was in 1917 known as theEquitable Life Building. A large building, although by no means thelargest office building in New York City, it occupies a one-block area atBroadway and Pine, and has thirty-four floors. The Bankers Club waslocated on the thirty-fourth floor. The tenant list in 1917 in effectreflected American involvement in the Bolshevik Revolution and itsaftermath. For example, the headquarters of the No. 2 District of theFederal Reserve System — the New York area — by far the most

important of the Federal Reserve districts, was located at 120 Broadway.The offices of several individual directors of the Federal Reserve Bank of New York and, most important, the American InternationalCorporation were also at 120 Broadway. By way of contrast, LudwigMartens, appointed by the Soviets as the first Bolshevik "ambassador" tothe United States and head of the Soviet Bureau, was in 1917 the vice

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 president of Weinberg & Posner — and also had offices at 120Broadway.*

Is this concentration an accident? Does the geographical contiguity have

any significance? Before attempting to suggest an answer, we have toswitch our frame of reference and abandon the left-right spectrum of  political analysis.

With an almost unanimous lack of perception the academic world hasdescribed and analyzed international political relations in the context of an unrelenting conflict between capitalism and communism, and rigidadherence to this Marxian formula has distorted modern history. Tossedout from time to time are odd remarks to the effect that the polarity isindeed spurious, but these are quickly dispatched to limbo. For example,Carroll Quigley, professor of international relations at GeorgetownUniversity, made the following comment on the House of Morgan:

More than fifty years ago the Morgan firm decided to infiltrate the Left-wing political movements in the United States. This was relatively easyto do, since these groups were starved for funds and eager for a voice toreach the people. Wall Street supplied both. The purpose was not to

destroy, dominate or take over...3

Professor Quigley's comment, apparently based on confidentialdocumentation, has all the ingredients of an historical bombshell if it can be supported. We suggest that the Morgan firm infiltrated not only thedomestic left, as noted by Quigley, but also the foreign left — that is, theBolshevik movement and the Third International. Even further, throughfriends in the U.S. State Department, Morgan and allied financialinterests, particularly the Rockefeller family, have exerted a powerful

influence on U.S.-Russian relations from World War I to the present.The evidence presented in this chapter will suggest that two of theoperational vehicles for infiltrating or influencing foreign revolutionarymovements were located at 120 Broadway: the first, the Federal ReserveBank of New York, heavily laced with Morgan appointees; the second,the Morgan-controlled American International Corporation. Further,

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there was an important interlock between the Federal Reserve Bank of  New York and the American International Corporation — C. A. Stone,the president of American International, was also a director of theFederal Reserve Bank.

The tentative hypothesis then is that this unusual concentration at asingle address was a reflection of purposeful actions by specific firmsand persons and that these actions and events cannot be analyzed withinthe usual spectrum of left-right political antagonism.

AMERICAN INTERNATIONAL CORPORATION

The American International Corporation (AIC) was organized in NewYork on November 22, 1915, by the J.P. Morgan interests, with major  participation by Stillman's National City Bank and the Rockefeller interests. The general office of AIC was at 120 Broadway. Thecompany's charter authorized it to engage in any kind of business, except banking and public utilities, in any country in the world. The stated purpose of the corporation was to develop domestic and foreignenterprises, to extend American activities abroad, and to promote the

interests of American and foreign bankers, business and engineering.Frank A. Vanderlip has described in his memoirs how AmericanInternational was formed and the excitement created on Wall Street over its business potential.4 The original idea was generated by a discussion between Stone & Webster — the international railroad contractors who"were convinced there was not much more railroad building to be donein the United States" — and Jim Perkins and Frank A. Vanderlip of  National City Bank (NCB).5 The original capital authorization was $50

million and the board of directors represented the leading lights of the New York financial world. Vanderlip records that he wrote as follows to NCB president Stillman, enthusing over the enormous potential for American International Corporation:

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James A. Farrell and Albert Wiggin have been invited [to be on the board] but had to consult their committees before accepting. I also havein mind asking Henry Walters and Myron T. Herrick. Mr. Herrick isobjected to by Mr. Rockefeller quite strongly but Mr. Stone wants him

and I feel strongly that he would be particularly desirable in France. Thewhole thing has gone along with a smoothness that has been gratifyingand the reception of it has been marked by an enthusiasm which has been surprising to me even though I was so strongly convinced we wereon the right track.

I saw James J. Hill today, for example. He said at first that he could not possibly think of extending his responsibilities, but after I had finished

telling him what we expected to do, he said he would be glad to go onthe board, would take a large amount of stock and particularly wanted asubstantial interest in the City Bank and commissioned me to buy himthe stock at the market.

I talked with Ogden Armour about the matter today for the first time. Hesat in perfect silence while I went through the story, and, without askinga single question, he said he would go on the board and wanted$500,000 stock.

Mr. Coffin [of General Electric] is another man who is retiring fromeverything, but has 'become so enthusiastic over this that he was willingto go on the board, and offers the most active cooperation.

I felt very good over getting Sabin. The Guaranty Trust is altogether themost active competitor we have in the field and it is of great value to getthem into the fold in this way. They have been particularly enthusiasticat Kuhn, Loeb's. They want to take up to $2,500,000. There was really

quite a little competition to see who should get on the board, but as I hadhappened to talk with Kahn and had invited him first, it was decided heshould go on. He is perhaps the most enthusiastic of any one. They wanthalf a million stock for Sir Ernest Castle** to whom they have cabledthe plan and they have back from him approval of it.

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I explained the whole matter to the Board [of the City Bank] Tuesdayand got nothing but favorable comments.6

Everybody coveted the AIC stock. Joe Grace (of W. R. Grace & Co.)

wanted $600,000 in addition to his interest in National City Bank.Ambrose Monell wanted $500,000. George Baker wanted $250,000.And "William Rockefeller tried, vainly, to get me to put him down for $5,000,000 of the common."7

By 1916 AIC investments overseas amounted to more than $23 millionand in 1917 to more than $27 million. The company establishedrepresentation in London, Paris, Buenos Aires, and Peking as well as inPetrograd, Russia. Less than two years after its formation AIC wasoperating on a substantial scale in Australia, Argentina, Uruguay,Paraguay, Colombia, Brazil, Chile, China, Japan, India, Ceylon, Italy,Switzerland, France, Spain, Cuba, Mexico, and other countries inCentral America.

American International owned several subsidiary companies outright,had substantial interests in yet other companies, and operated still other firms in the United States and abroad. The Allied Machinery Company

of America was founded in February 1916 and the entire share capitaltaken up by American International Corporation. The vice president of American International Corporation was Frederick Holbrook, anengineer and formerly head of the Holbrook Cabot & RollinsCorporation. In January 1917 the Grace Russian Company was formed,the joint owners being W. R. Grace & Co. and the San Galli TradingCompany of Petrograd. American International Corporation had asubstantial investment in the Grace Russian Company and throughHolbrook an interlocking directorship.

AIC also invested in United Fruit Company, which was involved inCentral American revolutions in the 1920s. The American InternationalShipbuilding Corporation was wholly owned by AIC and signedsubstantial contracts for war vessels with the Emergency FleetCorporation: one contract called for fifty vessels, followed by another 

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contract for forty vessels, followed by yet another contract for sixtycargo vessels. American International Shipbuilding was the largestsingle recipient of contracts awarded by the U.S. governmentEmergency Fleet Corporation. Another company operated by AIC was

G. Amsinck & Co., Inc. of New York; control of the company wasacquired in November 1917. Amsinck was the source of financing for German espionage in the United States (see page 66). In November 1917the American International Corporation formed and wholly owned theSymington Forge Corporation, a major government contractor for shellforgings. Consequently, American International Corporation hadsignificant interest in war contracts within the United States andoverseas. It had, in a word, a vested interest in the continuance of World

War I.

The directors of American International and some of their associationswere (in 1917):

J. OGDEN ARMOUR Meatpacker, of Armour & Company, Chicago;director of the National City Bank of New York; and mentioned by A.A. Heller in connection with the Soviet Bureau (see p. 119).

GEORGE JOHNSON BALDWIN Of Stone & Webster, 120 Broadway.During World War I Baldwin was chairman of the board of AmericanInternational Shipbuilding, senior vice president of AmericanInternational Corporation, director of G. Amsinck (Von Pavenstedt of Amsinck was a German espionage paymaster in the U.S., see page 65),and a trustee of the Carnegie Foundation, which financed the MarburgPlan for international socialism to be controlled behind the scenes byworld finance (see page 174-6).

C. A. COFFIN Chairman of General Electric (executive office: 120Broadway), chairman of cooperation committee of the American RedCross.

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W. E. COREY (14 Wall Street) Director of American Bank NoteCompany, Mechanics and Metals Bank, Midvale Steel and Ordnance,and International Nickel Company; later director of National City Bank.

ROBERT DOLLAR San Francisco shipping magnate, who attempted in behalf of the Soviets to import tsarist gold rubles into U.S. in 1920, incontravention of U.S. regulations.

PIERRE S. DU PONT Of the du Pont family.

PHILIP A. S. FRANKLIN Director of National City Bank.

J.P. GRACE Director of National City Bank.

R. F. HERRICK Director, New York Life Insurance; former president of the American Bankers Association; trustee of Carnegie Foundation.

OTTO H. KAHN Partner in Kuhn, Loeb. Kahn's father came to Americain 1948, "having taken part in the unsuccessful German revolution of that year." According to J. H. Thomas (British socialist, financed by theSoviets), "Otto Kahn's face is towards the light."

H. W. PRITCHETT Trustee of Carnegie Foundation.

PERCY A. ROCKEFELLER Son of John D. Rockefeller; married toIsabel, daughter of J. A. Stillman of National City Bank.

JOHN D. RYAN Director of copper-mining companies, National CityBank, and Mechanics and Metals Bank. (See frontispiece to this book.)

W. L. SAUNDERS Director the Federal Reserve Bank of New York,

120 Broadway, and chairman of Ingersoll-Rand. According to the National Cyclopaedia (26:81): "Throughout the war he was one of thePresident's most trusted advisers." See page 15 for his views on theSoviets.

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J. A. STILLMAN President of National City Bank, after his father (J.Stillman, chairman of NCB) died in March 1918.

C. A. STONE Director (1920-22) of Federal Reserve Bank of New

York, 120 Broadway; chairman of Stone & Webster, 120 Broadway; president (1916-23) of American International Corporation, 120Broadway.

T. N. VAIL President of National City Bank of Troy, New York 

F. A. VANDERLIP President of National City Bank.

E. S. WEBSTER Of Stone & Webster, 120 Broadway.

A. H. WIGGIN Director of Federal Reserve Bank of New York in theearly 1930s.

BECKMAN WINTHROPE Director of National City Bank.

WILLIAM WOODWARD Director of Federal Reserve Bank of NewYork, 120 Broadway, and Hanover National Bank.

The interlock of the twenty-two directors of American InternationalCorporation with other institutions is significant. The National CityBank had no fewer than ten directors on the board of AIC; Stillman of  NCB was at that time an intermediary between the Rockefeller andMorgan interests, and both the Morgan and the Rockefeller interestswere represented directly on AIC. Kuhn, Loeb and the du Ponts eachhad one director. Stone & Webster had three directors. No fewer thanfour directors of AIC (Saunders, Stone, Wiggin, Woodward) either weredirectors of or were later to join the Federal Reserve Bank of New York.We have noted in an earlier chapter that William Boyce Thompson, whocontributed funds and his considerable prestige to the Bolshevik Revolution, was also a director of the Federal Reserve Bank of NewYork — the directorate of the FRB of New York comprised only ninemembers.

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THE INFLUENCE OF AMERICAN INTERNATIONAL ON THE

REVOLUTION

Having identified the directors of AIC we now have to identify their revolutionary influence.

As the Bolshevik Revolution took hold in central Russia, Secretary of State Robert Lansing requested the views of American InternationalCorporation on the policy to be pursued towards the Soviet regime. OnJanuary 16, 1918 — barely two months after the takeover in Petrogradand Moscow, and before a fraction of Russia had come under Bolshevik control — William Franklin Sands, executive secretary of AmericanInternational Corporation, submitted the requested memorandum on theRussian political situation to Secretary Lansing. Sands covering letter,headed 120 Broadway, began:

To the Honourable January 16, 1918Secretary of StateWashington D.C.

Sir I have the honor to enclose herewith the memorandum which yourequested me to make for you on my view of the political situation inRussia.

I have separated it into three parts; an explanation of the historicalcauses of the Revolution, told as briefly as possible; a suggestion as to policy and a recital of the various branches of American activity at work 

now in Russia ....8

Although the Bolsheviks had only precarious control in Russia — andindeed were to come near to losing even this in the spring of 1918 — Sands wrote that already (January 1918) the United States had delayedtoo long in recognizing "Trotzky." He added, "Whatever ground may

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have been lost, should be regained now, even at the cost of a slight personal triumph for Trotzky."9

Firms located at, or near, 120 Broadway:

American International Corp 120 Broadway National City Bank 55 Wall StreetBankers Trust Co Bldg 14 Wall Street New York Stock Exchange 13 Wall Street/12 BroadMorgan Building corner Wall & BroadFederal Reserve Bank of NY 120 Broadway

Equitable Building 120 BroadwayBankers Club 120 BroadwaySimpson, Thather & Bartlett 62 Cedar StWilliam Boyce Thompson 14 Wall StreetHazen, Whipple & Fuller 42nd Street BuildingChase National Bank 57 BroadwayMcCann Co 61 BroadwayStetson, Jennings & Russell 15 Broad Street

Guggenheim Exploration 120 BroadwayWeinberg & Posner 120 BroadwaySoviet Bureau 110 West 40th StreetJohn MacGregor Grant Co 120 BroadwayStone & Webster 120 BroadwayGeneral Electric Co 120 BroadwayMorris Plan of NY 120 BroadwaySinclair Gulf Corp 120 Broadway

Guaranty Securities 120 BroadwayGuaranty Trust 140 Broadway

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Map of Wall Street Area Showing Office Locations

Sands then elaborates the manner in which the U.S. could make up for lost time, parallels the Bolshevik Revolution to "our own revolution,"and concludes: "I have every reason to believe that the Administration

 plans for Russia will receive all possible support from Congress, and thehearty endorsement of public opinion in the United States."

In brief, Sands, as executive secretary of a corporation whose directorswere the most prestigious on Wall Street, provided an emphaticendorsement of the Bolsheviks and the Bolshevik Revolution, andwithin a matter of weeks after the revolution started. And as a director of the Federal Reserve Bank of New York, Sands had just contributed $1million to the Bolsheviks — such endorsement of the Bolsheviks by

 banking interests is at least consistent.

Moreover, William Sands of American International was a man withtruly uncommon connections and influence in the State Department.

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"provide the machinery" for any such assistance, "it seems, therefore,necessary to call in the financial, commercial and manufacturing interestof the United States to provide such machinery under the control of theChief Commissioner or whatever official is selected by the President for 

this purpose."13 In other words, Sands obviously intended that anycommercial exploitation of Bolshevik Russia was going to include 120Broadway.

THE FEDERAL RESERVE BANK OF NEW YORK 

The certification of incorporation of the Federal Reserve Bank of NewYork was filed May 18, 1914. It provided for three Class A directorsrepresenting member banks in the district, three Class B directorsrepresenting commerce, agriculture, and industry, and three Class Cdirectors representing the Federal Reserve Board. The original directorswere elected in 1914; they proceeded to generate an energetic program.In the first year of organization the Federal Reserve Bank of New York held no fewer than 50 meetings.

From our viewpoint what is interesting is the association between, on the

one hand, the directors of the Federal Reserve Bank (in the New York district) and of American International Corporation, and, on the other,the emerging Soviet Russia.

In 1917 the three Class A directors were Franklin D. Locke, WilliamWoodward, and Robert H. Treman. William Woodward was a director of American International Corporation (120 Broadway) and of theRockefeller-controlled Hanover National Bank. Neither Locke nor Treman enters our story. The three Class B directors in 1917 were

William Boyce Thompson, Henry R. Towne, and Leslie R. Palmer. Wehave already noted William B. Thompson's substantial cash contributionto the Bolshevik cause. Henry R. Towne was chairman of the board of directors of the Morris Plan of New York, located at 120 Broadway; hisseat was later taken by Charles A. Stone of American InternationalCorporation (120 Broadway) and of Stone & Webster (120 Broadway).

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Leslie R. Palmer does not come into our story. The three Class Cdirectors were Pierre Jay, W. L. Saunders, and George Foster Peabody. Nothing is known about Pierre Jay, except that his office was at 120Broadway and he appeared to be significant only as the owner of 

Brearley School, Ltd. William Lawrence Saunders was also a director of American International Corporation; he openly avowed, as we haveseen, pro-Bolshevik sympathies, disclosing them in a letter to PresidentWoodrow Wilson (see page 15). George Foster Peabody was an activesocialist (see page 99-100).

In brief, of the nine directors of the Federal Reserve Bank of New York,four were physically located at 120 Broadway and two were then

connected with American International Corporation. And at least four members of AIC's board were at one time or another directors of theFRB of New York. We could term all of this significant, but regard itnot necessarily as a dominant interest.

AMERICAN-RUSSIAN INDUSTRIAL SYNDICATE INC.

William Franklin Sands' proposal for an economic commission to Russia

was not adopted. Instead, a private vehicle was put together to exploitRussian markets and the earlier support given the Bolsheviks. A groupof industrialists from 120 Broadway formed the American-RussianIndustrial Syndicate Inc. to develop and foster these opportunities. Thefinancial backing for the new firm came from the Guggenheim Brothers,120 Broadway, previously associated with William Boyce Thompson(Guggenheim controlled American Smelting and Refining, and theKennecott and Utah copper companies); from Harry F. Sinclair, president of Sinclair Gulf Corp., also 120 Broadway; and from James G.White of J. G. White Engineering Corp. of 43 Exchange Place — theaddress of the American-Russian Industrial Syndicate.

In the fall of 1919 the U.S. embassy in London cabled Washington aboutMessrs. Lubovitch and Rossi "representing American-Russian Industrial

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confidence of Lenin ("Here is a book I should like to see published inmillions of copies and translated into all languages," commented Leninin Ten Days), who was a member of the Third International, and who possessed a Military Revolutionary Committee pass (No. 955, issued

 November 16, 1917) giving him entry into the Smolny Institute (therevolutionary headquarters) at any time as the representative of the"American Socialist press," was also — despite these things — a puppetunder the "control" of the Morgan financial interests through theAmerican International Corporation. Documentary evidence exists for this seeming conflict (see below and Appendix 3).

Let's fill in the background. Articles for the Metropolitan and the

Masses gave John Reed a wide audience for reporting the Mexican andthe Russian Bolshevik revolutions. Reed's biographer Granville Hickshas suggested, in John Reed, that "he was . . . the spokesman of theBolsheviks in the United States." On the other hand, Reed's financialsupport from 1913 to 1918 came heavily from the Metropolitan — 

owned  by Harry Payne Whitney, a director of the Guaranty Trust, aninstitution cited in every chapter of this book — and also' from the NewYork private banker and merchant Eugene Boissevain, who channeledfunds to Reed both directly and through the pro-Bolshevik Masses. In

other words, John Reed's financial support came from two supposedlycompeting elements in the political spectrum. These funds were for writing and may be classified as: payments from Metropolitan from1913 onwards for articles; payments from Masses from 1913 onwards,which income at least in part originated with Eugene Boissevain. A thirdcategory should be mentioned: Reed received some minor andapparently unconnected payments from Red Cross commissioner Raymond Robins in Petrograd. Presumably he also received smaller 

sums for articles written for other journals, and book royalties; but noevidence has been found giving the amounts of such payments.

JOHN REED AND THE METROPOLITAN MAGAZINE

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The Metropolitan supported contemporary establishment causesincluding, for example, war preparedness. The magazine was owned byHarry Payne Whitney (1872-1930), who founded the Navy League andwas partner in the J.P. Morgan firm. In the late 1890s Whitney became a

director of American Smelting and Refining and of GuggenheimExploration. Upon his father's death in 1908, he became a director of numerous other companies, including Guaranty Trust Company. Reed began writing for Whitney's Metropolitan in July 1913 and contributed ahalf-dozen articles on the Mexican revolutions: "With Villa in Mexico,""The Causes Behind/Mexico's Revolution," "If We Enter Mexico,""With Villa on the March," etc. Reed's sympathies were withrevolutionist Pancho Villa. You will recall the link (see page 65)

 between Guaranty Trust and Villa's ammunition supplies.

In any event, Metropolitan was Reed's main source of income. In thewords of biographer Granville Hicks, "Money meant primarily work for the Metropolitan and incidentally articles and stories for other payingmagazines." But employment by Metropolitan did not inhibit Reed fromwriting articles critical of the Morgan and Rockefeller interests. Onesuch piece, "At the Throat of the Republic" (Masses, July 1916), tracedthe relationship between munitions industries, the national security-

 preparedness lobby, the interlocking directorates of the Morgan-Rockefeller interest, "and showed that they dominated both the preparedness societies and the newly formed American InternationalCorporation, organized for the exploitation of backward countries."17

In 1915 John Reed was arrested in Russia by tsarist authorities, and theMetropolitan intervened with the State Department in Reed's behalf. OnJune 21, 1915, H. J. Whigham wrote Secretary of State Robert Lansing

informing him that John Reed and Boardman Robinson (also arrestedand also a contributor to the Masses) were in Russia "with commissionfrom the Metropolitan magazine to write articles and to makeillustrations in the Eastern field of the War." Whigham pointed out thatneither had "any desire or authority from us to interfere with the

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operations of any belligerent powers that be." Whigham's letter continues:

If Mr. Reed carried letters of introduction from Bucharest to people in

Galicia of an anti-Russian frame of mind I am sure that it was doneinnocently with the simple intention of meeting as many people as possible ....

Whigham points out to Secretary Lansing that John Reed was known atthe White House and had given "some assistance" to the administrationon Mexican affairs; he concludes: "We have the highest regard for Reed's great qualities as a writer and thinker and we are very anxious asregards his safety."18 The Whigham letter is not, let it be noted, from anestablishment journal in support of a Bolshevik writer; it is from anestablishment journal in support of a Bolshevik writer for the Masses

and similar revolutionary sheets, a writer who was also the author of trenchant attacks ("The Involuntary Ethics of Big Business: A Fable for Pessimists," for example) on the same Morgan interests that ownedMetropolitan.

The evidence of finance by the private banker Boissevain is

incontrovertible. On February 23, 1918, the American legation atChristiania, Norway, sent a cable to Washington in behalf of John Reedfor delivery to Socialist Party leader Morris Hillquit. The cable stated in part: "Tell Boissevain must draw on him but carefully." A cryptic note by Basil Miles in the State Department files, dated April 3, 1918, states,"If Reed is coming home he might as well have money. I understandalternatives are ejection by Norway or polite return. If this so latter seems preferable." This protective note is followed by a cable datedApril 1, 1918, and again from the American legation at Christiania:"John Reed urgently request Eugene Boissevain, 29 Williams Street, New York, telegraph care legation $300.00."19 This cable was relayed toEugene Boissevain by the State Department on April 3, 1918.

Reed apparently received his funds and arrived safely back in the UnitedStates. The next document in the State Department files is a letter to

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William Franklin Sands from John Reed, dated June 4, 1918, and writtenfrom Crotonon-Hudson, New York. In the letter Reed asserts that he hasdrawn up a memorandum for the State Department, and appeals to Sandsto use his influence to get release of the boxes of papers brought back 

from Russia. Reed concludes, "Forgive me for bothering you, but I don'tknow where else to turn, and I can't afford another trip to Washington."Subsequently, Frank Polk, acting secretary of state, received a letter from Sands regarding the release of John Reed's papers. Sands' letter,dated June 5, 1918, from 120 Broadway, is here reproduced in full; itmakes quite explicit statements about control of Reed:

120 BROADWAY NEW YORK 

June fifth, 1918

My dear Mr. Polk:

I take the liberty of enclosing to you an appeal from John ("Jack") Reedto help him, if possible, to secure the release of the papers which he brought into the country with him from Russia.

I had a conversation with Mr. Reed when he first arrived, in which hesketched certain attempts by the Soviet Government to initiateconstructive development, and expressed the desire to place whatever observations he had made or information he had obtained through hisconnection with Leon Trotzky, at the disposal of our Government. Isuggested that he write a memorandum on this subject for you, and promised to telephone to Washington to ask you to give him aninterview for this purpose. He brought home with him a mass of paperswhich were taken from him for examination, and on this subject also he

wished to speak to someone in authority, in order to voluntarily offer an>, information they might contain to the Government, and to ask for the release of those which he needed for his newspaper and magazinework.

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I do not believe that Mr. Reed is either a "Bolshevik" or a "dangerousanarchist," as I have heard him described. He is a sensational journalist,without doubt, but that is all. He is not trying to embarrass our Government, and for this reason refused the "protection" which I

understand was offered to him by Trotzky, when he returned to NewYork to face the indictment against him in the "Masses" trial. He is liked by the Petrograd Bolsheviki, however, and, therefore, anything whichour police may do which looks like "persecution" will be resented inPetrograd, which I believe to be undesirable because unnecessary. He

can be handled and controlled much better by other means than through

the police.

I have not seen the memorandum he gave to Mr. Bullitt — I wanted himto let me see it first and perhaps to edit it, but he had not the opportunityto do so.

I hope that you will not consider me to be intrusive in this matter or meddling with matters which do not concern me. I believe it to be wisenot to offend the Bolshevik leaders unless and until it may become

necessary to do so — if it should become necessary — and it is unwise tolook on every one as a suspicious or even dangerous character, who has

had friendly relations with the Bolsheviki in Russia. I think it better  policy to attempt to use such people for our own purposes in developing 

our policy toward Russia, if it is possible to do so. The lecture whichReed was prevented by the police from delivering in Philadelphia (helost his head, came into conflict with the police and was arrested) is theonly lecture on Russia which I would have paid to hear, if I had notalready seen his notes on the subject. It covered a subject which wemight quite possibly find to be a point of contact with the Soviet

Government, from which to begin constructive work!Can we not use him, instead of embittering him and making him anenemy? He is not well balanced, but he is, unless I am very muchmistaken, susceptible to discreet guidance and might be quite useful.

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Sincerely yours,William Franklin Sands

The Honourable

Frank Lyon Polk Counselor for the Department of State

Washington, D.C.

WFS:AOEnclosure20

The significance of this document is the hard revelation of direct

intervention by an officer (executive secretary) of AmericanInternational Corporation in behalf of a known Bolshevik. Ponder a fewof Sands' statements about Reed: "He can be handled and controlledmuch better by other means than through the police"; and, "Can we notuse him, instead of embittering him and making him an enemy? . . . heis, unless I am very much mistaken, susceptible to discreet guidance andmight be quite useful." Quite obviously, the American InternationalCorporation viewed John Reed as an agent or a potential agent who

could be, and probably had already been, brought under its control. Thefact that Sands was in a position to request editing a memorandum byReed (for Bullitt) suggests some degree of control had already beenestablished.

Then note Sands' potentially hostile attitude towards — and barelyveiled intent to provoke — the Bolsheviks: "I believe it to be wise not tooffend the Bolshevik leaders unless and until it may become necessary

to do so — if it should become necessary . . ." (italics added).

This is an extraordinary letter in behalf of a Soviet agent from a privateU.S. citizen whose counsel the State Department had sought, andcontinued to seek.

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A later memorandum, March 19, 1920, in the State files reported thearrest of John Reed by the Finnish authorities at Abo, and Reed's possession of English, American and German passports. Reed, travelingunder the alias of Casgormlich, carried diamonds, a large sum of money,

Soviet propaganda literature, and film. On April 21, 1920, the Americanlegation at Helsingfors cabled the State Department:

Am forwarding by the next pouch certified copies of letters from EmmaGoldman, Trotsky, Lenin and Sirola found in Reed's possession. ForeignOffice has promised to furnish complete record of the Court proceedings.

Once again Sands intervened: "I knew Mr. Reed personally."21 And, asin 1915, Metropolitan magazine also came to Reed's aid. H. J. Whighamwrote on April 15, 1920, to Bainbridge Colby in the State Department:"Have heard John Reed in danger of being executed in Finland. Hopethe State Dept. can take immediate steps to see that he gets proper trial.Urgently request prompt action."22 This was in addition to an April 13,1920 telegram from Harry Hopkins, who was destined for fame under President Roosevelt:

Understand State Dept. has information Jack Reed arrested Finland, will be executed. As one of his friends and yours and on his wife's behalf urge you take prompt action prevent execution and secure release. Feelsure can rely your immediate and effective intervention.23

John Reed was subsequently released by the Finnish authorities.

This paradoxical account on intervention in behalf of a Soviet agent canhave several explanations. One hypothesis that fits other evidence

concerning Wall Street and the Bolshevik Revolution is that John Reedwas in effect an agent of the Morgan interests — perhaps only half aware of his double role — that his anticapitalist writing maintained thevaluable myth that all capitalists are in perpetual warfare with allsocialist revolutionaries. Carroll Quigley, as we have already noted,reported that the Morgan interests financially supported domestic

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revolutionary organizations and anticapitalist writings.24 And we have presented in this chapter irrefutable documentary evidence that theMorgan interests were also effecting control of a Soviet agent,interceding on his behalf and, more important, generally intervening in

 behalf of Soviet interests with the U.S. government. These activitiescentered at a single address: 120 Broadway, New York City.

Footnotes:

1By a quirk the papers of incorporation for the Equitable Office Buildingwere drawn up by Dwight W. Morrow, later a Morgan partner, but then

a member of the law firm of Simpson, Thacher & Bartlett. The Thacher firm contributed two members to the 1917 American Red Cross Missionto Russia (see chapter five).

3Carroll Quigley, Tragedy and Hope (New York: Macmillan, 1966), p.938. Quigley was writing in 1965, so this places the start of theinfiltration at about 1915, a date consistent with the evidence here presented.

4Frank A. Vanderlip, From Farm Boy to Financier (New York: A.Appleton-Century, 1935).

5Ibid., p. 267.

6Ibid., pp. 268-69. It should be noted that several names mentioned byVanderlip turn up elsewhere in this book: Rockefeller, Armour,Guaranty Trust, and (Otto) Kahn all had some connection more or less

with the Bolshevik Revolution and its aftermath.7Ibid., p. 269.

8U.S. Stale Dept. Decimal File, 861.00/961.

9Sands memorandum to Lansing, p. 9.

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10William Franklin Sands wrote several books, including Undiplomatic

Memoirs (New York: McGraw-Hill, 1930), a biography covering theyears to 1904. Later he wrote Our .Jungle Diplomacy (Chapel Hill:University of North Carolina Press, 1941), an unremarkable treatise on

imperialism in Latin America. The latter work is notable only for aminor point on page 102: the willingness to blame a particularlyunsavory imperialistic adventure on Adolf Stahl, a New York banker,while pointing oust quite unnecessarily that Stahl was of "German-Jewish origin." In August 1918 he published an article, "SalvagingRussia," in Asia, to explain support of the Bolshevik regime.

11All the above in U.S. State Dept. Decimal File, 861.00/969.

12The author cannot forbear comparing the treatment of academicresearchers. In 1973, for example, the writer was still denied access tosome State Department files dated 1919.

13U.S. State Dept. Decimal File, 861.51/333.

14U.S. State Dept. Decimal File, 861.516 84, September 2, 1919.

15Ibid.

16Other contributors to the Masses mentioned in this book were journalist Robert Minor, chairman of the, U.S. Public Info, marionCommittee; George Creel; Carl Sandburg, poet-historian; and BoardmanRobinson, an artist.

17Granville Hicks, John Reed, 1887-1920 (New York: Macmillan, 1936), p. 215.

18U.S. State Dept. Decimal File, 860d.1121 R 25/4.

19Ibid., 360d.1121/R25/18. According to Granville Hicks in John Reed,

"Masses could not pay his [Reed's] expenses. Finally, friends of themagazine, notably Eugene Boissevain, raised the money" (p. 249).

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20U.S. State Dept. Decimal File, 360. D. II21.R/20/221/2, /R25 (JohnReed). The letter was transferred by Mr. Polk to the State Departmentarchives on May 2, 1935. All italics added.

21

Ibid., 360d.1121 R 25/72.22Ibid.

23This was addressed to Bainbridge Colby, ibid., 360d.1121 R 25/30.Another letter, dated April 14, 1920, and addressed to the secretary of state from 100 Broadway, New York, was from W. Bourke Cochrane; italso pleaded for the release of John Reed.

24

Quigley, op. cit.

*The John MacGregor Grant Co., agent for the Russo-Asiatic Bank (involved in financing the Bolsheviks), was at 120 Broadway — andfinanced by Guaranty Trust Company.

**Sir Ernest Cassel, prominent British financier.

Chapter IV

GUARANTY TRUST GOES TO RUSSIA

Soviet Govemment desire Guarantee [ sic] Trust Company tobecome fiscal agent in United States for all Soviet operations and

contemplates American purchase Eestibank with a view to complete

linking of Soviet fortunes with American financial interests. 

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William H. Coombs, reporting to the U.S. embassy in London, June 1,

1920 (U.S. State Dept. Decimal File, 861.51/752). ("Eestibank" was an

 Estonian bank  )

In 1918 the Soviets faced a bewildering array of internal and external problems. They occupied a mere fraction of Russia. To subdue theremainder, they needed foreign arms, imported food, outside financialsupport, diplomatic recognition, and — above all — foreign trade. Togain diplomatic recognition and foreign trade, the Soviets first neededrepresentation abroad, and representation in turn required financing through gold or foreign currencies. As we have already seen, the first

step was to establish the Soviet Bureau in New York under LudwigMartens. At the same time, efforts were made to transfer funds to theUnited States and Europe for purchases of needed goods. Then influencewas exerted in the U.S. to gain recognition or to obtain the exportlicenses needed to ship goods to Russia.

 New York bankers and lawyers provided significant — in some cases,critical — assistance for each of these tasks. When Professor George V.Lomonossoff, the Russian technical expert in the Soviet Bureau, needed

to transfer funds from the chief Soviet agent in Scandinavia, a prominantWall Street attorney came to his assistance — using official StateDepartment channels and the acting secretary of state as an intermediary.When gold had to be transferred to the United States, it was AmericanInternational Corporation, Kuhn, Loeb & Co., and Guaranty Trust thatrequested the facilities and used their influence in Washington to smooththe way. And when it came to recognition, we find American firms pleading .with Congress and with the public to endorse the Soviet

regime.Lest the reader should deduce — too hastily — from these assertionsthat Wall Street was indeed tinged with Red, or that Red flags wereflying in the street (see frontispiece), we also in a later chapter presentevidence that the J.P. Morgan firm financed Admiral Kolchak in Siberia.

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Aleksandr Kolchak was fighting the Bolsheviks, to install his own brandof authoritarian rule. The firm also contributed to the anti-CommunistUnited Americans organization.

WALL STREET COMES TO THE AID OF PROFESSOR 

LOMONOSSOFF

The case of Professor Lomonossoff is a detailed case history of WallStreet assistance to the early Soviet regime. In late 1918 George V.Lomonossoff, member of the Soviet Bureau in New York and later firstSoviet commissar of railroads, found himself stranded in the UnitedStates without funds. At this time Bolshevik funds were denied entryinto the United States; indeed, there was no official recognition of theregime at all. Lomonossoff was the subject of a letter of October 24,1918, from the U.S. Department of Justice to the Department of State.1 

The letter referred to Lomonossoff's Bolshevik attributes and pro-Bolshevik speeches. The investigator concluded, "Prof. Lomonossoff isnot a Bolshevik although his speeches constitute unequivocal support for the Bolshevik cause." Yet Lomonossoff was able to pull strings at thehighest levels of the administration to have $25,000 transferred from the

Soviet Union through a Soviet espionage agent in Scandinavia (who washimself later to become confidential assistant to Reeve Schley, a vice president of Chase Bank). All this with the assistance of a member of a prominent Wall Street firm of attorneys!2

The evidence is presented in detail because the details themselves pointup the close relationship between certain interests that up to now have been thought of as bitter enemies. The first indication of Lornonossoff's problem is a letter dated January 7, 1919, from Thomas L. Chadbourneof Chadbourne, Babbitt 8e Wall of 14 Wall Street (same Address asWilliam Boyce Thompson's) to Frank Polk, acting secretary of state. Note the friendly salutation and casual reference to Michael Gruzenberg,alias Alexander Gumberg, chief Soviet agent in Scandinavia and later Lomonossoff's assistant:

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Dear Frank: You were kind enough to say that if I could inform you of the status of the $25,000 item of personal funds belonging to Mr. & Mrs.Lomonossoff you would set in motion the machinery necessary to obtainit here for them.

I have communicated with Mr. Lomonossoff with respect to it, and hetells me that Mr. Michael Gruzenberg, who went to Russia for Mr.Lomonossoff prior to the difficulties between Ambassador Bakhmeteff and Mr. Lomonossoff, transmitted the information to him respecting thismoney through three Russians who recently arrived from Sweden, andMr. Lomonossoff believes that the money is held at the Russian embassyin Stockholm, Milmskilnad Gaten 37. If inquiry from the State

Department should develop this to be not the place where the money ison deposit, then the Russian embassy in Stockholm can give the exactaddress of Mr. Gruzenberg, who can give the proper informationrespecting it. Mr. Lomonossoff does not receive letters from Mr.Gruzenberg, although he is informed that they have been written: nor have any of his letters to Mr. Gruzenberg been delivered, he is alsoinformed. For this reason it is impossible to be more definite than I have been, but I hope something can be done to relieve his and his wife'sembarrassment for lack of funds, and it only needs a little help to secure

this money which belongs to them to aid them on this side of the water.

Thanking you in advance for anything you can do, I beg to remain, asever,

Yours sincerely,Thomas L. Chadbourne.

In 1919, at the time this letter was written, Chadbourne was a dollar-a-

year man in Washington, counsel and director of the U.S. War TradeBoard, and a director of the U.S. Russian Bureau Inc., an official frontcompany of the U.S. government. Previously, in 1915, Chadbourneorganized Midvale Steel and Ordnance to take advantage of war  business. In 1916 he became chairman of the Democratic Finance

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Committee and later a director of Wright Aeronautical and o[ Mack Trucks.

The reason Lomonossoff was not receiving letters from Gruzenberg is

that they were, in all probability, being intercepted by one of severalgovernments taking a keen interest in the latter's activities.

On January 11, 1919, Frank Polk cabled the American legation inStockholm:

Department is in receipt of information that $25,000, personal fundsof .... Kindly inquire of the Russian Legation informally and personallyif such funds are held thus. Ascertain, if not, address of Mr. Michael

Gruzenberg, reported to be in possession of information on this subject.Department not concerned officially, merely undertaking inquiries on behalf of a former Russian official in this country.

Polk, Acting

Polk appears in this letter to be unaware of Lomonossoff's Bolshevik connections, and refers to him as "a former Russian official in thiscountry." Be that as it may, within three days Polk received a reply fromMorris at the U.S. Legation in Stockholm:

January 14, 3 p.m. 3492. Your January 12, 3 p.m., No. 1443.

Sum of $25,000 of former president of Russian commission of ways of communication in United States not known to Russian legation; neither can address of Mr. Michael Gruzenberg be obtained.

Morris

Apparently Frank Polk then wrote to Chadbourne (the letter is notincluded in the source) and indicated that State could find neither Lomonossoff nor Michael Gruzenberg. Chadbourne replied on January21, 1919:

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Dear Frank: Many thanks for your letter of January 17. I understand thatthere are two Russian legations in Sweden, one being the soviet and theother the Kerensky, and I presume your inquiry was directed to thesoviet legation as that was the address I gave you in my letter, namely,

Milmskilnad Gaten 37, Stockholm.

Michael Gruzenberg's address is, Holmenkollen Sanitarium, Christiania, Norway, and I think the soviet legation could find out all about the fundsthrough Gruzenberg if they will communicate with him.

Thanking you for taking this trouble and assuring you of my deepappreciation, I remain,

Sincerely yours,Thomas L. Chadbourne

We should note that a Wall Street lawyer had the address of Gruzenberg,chief Bolshevik agent in Scandinavia, at a time when the actingsecretary of state and the U.S. Stockholm legation had no record of theaddress; nor could the legation track it down. Chadbourne also presumedthat the Soviets were the official government of Russia, although that

government was not recognized by the United States, and Chadbourne'sofficial government position on the War Trade Board would require himto know that.

Frank Polk then cabled the American legation at Christiania, Norway,with the address of Michael Gruzenberg. It is not known whether Polk knew he was passing on the address of an espionage agent, but hismessage was as follows:

To American Legation, Christiania. January 25, 1919. It is reported thatMichael Gruzenberg is at Holmenkollen Sanitarium. Is it possible for you to locate him and inquire if he has any knowledge respectingdisposition of $25,000 fund belonging to former president of Russianmission of ways of communication in the United States, Professor Lomonossoff.

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Polk, Acting

The U.S. representative (Schmedeman) at Christiania knew Gruzenbergwell. Indeed, the name had figured in reports from Schmedeman to

Washington concerning Gruzenberg's pro-Soviet activities in Norway.Schmedeman replied:

January 29, 8 p.m. 1543. Important. Your January 25, telegram No. 650.

Before departing to-day for Russia, Michael Gruzenberg informed our naval attache that when in Russia some few months ago he had received,at Lomonossoff's request, $25,000 from the Russian RailwayExperimental Institute, of which Prof. Lomonossoff was president.

Gruzenberg claims that to-day he cabled attorney for Lomonossoff in New York, Morris Hillquitt [sic], that he, Gruzenberg, is in possessionof the money, and before forwarding it is awaiting further instructionsfrom the United States, requesting in the cablegram that Lomonossoff befurnished with living expenses for himself and family by Hillquitt pending the receipt of the money.3

As Minister Morris was traveling to Stockholm on the same train as

Gruzenberg, the latter stated that he would advise further with Morris inreference to this subject.

Schmedeman

The U.S. minister traveled with Gruzenberg to Stockholm where hereceived the following cable from Polk:

It is reported by legation at Christiania that Michael Gruzenberg, has for 

Prof. G. Lomonossoff, the . . . sum of $25,000, received from RussianRailway Experimental Institute. If you can do so without being involvedwith Bolshevik authorities, department will be glad for you to facilitatetransfer of this money to Prof. Lomonossoff in this country. Kindlyreply.

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This cable produced results, for on February 5, 1919, Frank Polk wroteto Chadbourne about a "dangerous bolshevik agitator," Gruzenberg:

My Dear Tom: I have a telegram from Christiania indicating that

Michael Gruzenberg has the $25,000 of Prof. Lomonossoff, andreceived it from the Russian Railway Experimental Institute, and that hehad cabled Morris Hillquitt [ sic] , at New York, to furnish Prof.Lomonossoff money for living expenses until the fund in question can be transmitted to him. As Gruzenberg has just been deported from Norway as a dangerous bolshevik agitator, he may have had difficultiesin telegraphing from that country. I understand he has now gone toChristiania, and while it is somewhat out of the department's line of 

action, I shall be glad, if you wish, to see if I can have Mr. Gruzenbergremit the money to Prof. Lomonossoff from Stockholm, and amtelegraphing our minister there to find out if that can be done.

Very sincerely, yours,Frank L. Polk 

The telegram from Christiania referred to in Polk's letter reads asfollows:

February 3, 6 p.m., 3580. Important. Referring department's january 12, No. 1443, $10,000 has now been deposited in Stockholm to my order to be forwarded to Prof. Lomonossoff by Michael Gruzenberg, one of theformer representatives of the bolsheviks in Norway. I informed him before accepting this money that I would communicate with you andinquire if it is your wish that this money be forwarded to Lomonossoff.Therefore I request instructions as to my course of action.

Morris

Subsequently Morris, in Stockholm, requested disposal instructions for a$10,000 draft deposited in a Stockholm bank. His phrase "[this] has beenmy only connection with the affair" suggests that Morris was aware thatthe Soviets could, and probably would, claim this as an officially

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expedited monetary transfer, since this action implied approval by theU.S. of such monetary transfers. Up to this time the Soviets had beenrequired to smuggle money into the U.S.

Four p.m. February 12, 3610, Routine.

With reference to my February 3, 6 p.m., No. 3580, and your February8, 7 p.m., No. 1501. It is not clear to me whether it is your wish for meto transfer through you the $10,000 referred to Prof. Lomonossoff.Being advised by Gruzenberg that he had deposited this money to theorder of Lomonossoff in a Stockholm bank and has advised the bank that this draft could be sent to America through me, provided I soordered, has been my only connection with the affair. Kindly wireinstructions.

Morris

Then follows a series of letters on the transfer of the $10,000 from A/B Nordisk Resebureau to Thomas L. Chadbourne at 520 Park Avenue, New York City, through the medium of the State Department. The firstletter contains instructions from Polk, on the mechanics of the transfer;

the second, from Morris to Polk, contains $10,000; the third, fromMorris to A/B Nordisk Resebureau, requesting a draft; the fourth is areply from the bank with a check; and the fifth is the acknowledgment.

Your February 12, 4 p.m., No. 3610.

Money may be transmitted direct to Thomas L. Chadbourne, 520 Park Avenue, New York City,

Polk, Acting* * * * *

Dispatch, No. 1600, March 6, 1919:

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The Honorable the Secretary of State,Washington

Sir: Referring to my telegram, No. 3610 of February 12, and to the

department's reply, No. 1524 of February 19 in regard to the sum of $10,000 for Professor Lomonossoff, I have the honor herewith to inclosea copy of a letter which I addressed on February 25 to A. B. Nordisk Resebureau, the bankers with whom this money was deposited; a copyof the reply of A. B. Nordisk Resebureau, dated February 26; and a copyof my letter to the A. B. Nordisk Resebureau, dated February 27.

It will be seen from this correspondence that the bank was desirous of having this money forwarded to Professor Lomonossoff. I explained tothem, however, as will be seen from my letter of February 27, that I hadreceived authorization to forward it directly to Mr. Thomas L.Chadbourne, 520 Park Avenue, New York City. I also inclose herewithan envelope addressed to Mr. Chadbourne, in which are inclosed a letter to him, together with a check on the National City Bank of New York for $10,000.

I have the honor to be,

sir, Your obedient servant,Ira N. Morris

* * * * *

A. B. Nordisk Reserbureau,

 No. 4 Vestra Tradgardsgatan, Stockholm.

Gentlemen: Upon receipt of your letter of January 30, stating that youhad received $10,000 to be paid out to Prof. G. V. Lomonossoff, uponmy request, I immediately telegraphed to my Government askingwhether they wished this money forwarded to Prof. Lomonossoff. I amto-day in receipt of a reply authorizing me to forward the money direct

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to Mr. Thomas L. Chadbourne, payable to Prof. Lomonossoff. I shall beglad to forward it as instructed by my Government.

I am, gentlemen,

Very truly, yours,Ira N. Morris

* * * * *

Mr. I. N. Morris,

American Minister, Stockholm

Deal Sir: We beg to acknowledge the receipt of your favor of yesterdayregarding payment of dollars 10,000 — to Professor G. V. Lomonossoff,and we hereby have the pleasure to inclose a check for said amount tothe order of Professor G. V. Lomonossoff, which we understand that youare kindly forwarding to this gentleman. We shall be glad to have your receipt for same, arid beg to remain,

Yours, respectfully,

A. B. Nordisk ReserbureauE. Molin

* * * * *

A. B. Nordisk Resebureau.

Stockholm

Gentlemen: I beg to acknowledge receipt of your letter of February 26,inclosing a check for $10,000 payable to Professor G. V. Lomonossoff.As I advised you in my letter of February 25, I have been authorized toforward this check to Mr. Thomas L. Chadbourne, 520 Park Avenue, New York City, and I shall forward it to this gentleman within the nextfew days, unless you indicate a wish to the contrary.

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Very truly, yours,Ira N. Morris

Then follow an internal State Department memorandum and

Chadbourne's acknowledgment:

Mr. Phillips to Mr. Chadbourne, April 3, 1919.

Sir: Referring to previous correspondence regarding a remittance of tenthousand dollars from A. B. Norsdisk Resebureau to Professor G. V.Lomonossoff, which you requested to be transmitted through theAmerican Legation at Stockholm, the department informs you that it isin receipt of a dispatch from the American minister at Stockholm dated

March 6, 1919, covering the enclosed letter addressed to you, together with a check for the amount referred to, drawn to the order to Professor Lomonossoff.

I am, sir, your obedient servantWilliam Phillips,

Acting Secretary of State.

Inclosure: Sealed letter addressed Mr. Thomas L. Chadbourne, inclosedwith 1,600 from Sweden.

* * * * *

Reply of Mr. Chadbourne, April 5, 1919.

Sir: I beg to acknowledge receipt of your letter of April 3, enclosingletter addressed to me, containing check for $10,000 drawn to the order of Professor Lomonossoff, which check I have to-day delivered.

I beg to remain, with great respect,Very truly, yours,

Thomas L. Chadbourne

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Subsequently the Stockholm legation enquired concerningLomonossoff's address in the U.S. and was informed by the StateDepartment that "as far as the department is aware Professor George V.Lomonossoff can be reached in care of Mr. Thomas L. Chadbourne, 520

Park Avenue, New York City."

It is evident that the State Department, for the reason either of personalfriendship between Polk and Chadbourne or of political influence, felt ithad to go along and act as bagman for a Bolshevik agent — just ejectedfrom Norway. But why would a prestigious establishment law firm be sointimately interested in the health and welfare of a Bolshevik emissary?Perhaps a contemporary State Department report gives the clue:

Martens, the Bolshevik representative, and Professor Lomonossoff are banking on the fact that Bullitt and his party will make a favorable reportto the Mission and the President regarding conditions in Soviet Russiaand that on the basis of this report the Government of the United Stateswill favor dealing with the Soviet Government as, proposed by Martens.March 29, 1919.4

THE STAGE IS SET FOR COMMERCIAL EXPLOITATION OFRUSSIA

It was commercial exploitation of Russia that excited Wall Street, andWall Street had lost no time in preparing its program. On May 1,1918 — an auspicious date for Red revolutionaries — the AmericanLeague to Aid and Cooperate with Russia was established, and its program approved in a conference held in the Senate Office Building,Washington, D.C. The officers and executive committee of the league

represented some superficially dissimilar factions. Its president was Dr.Frank J. Goodnow, president of Johns Hopkins University. Vice presidents were the ever active William Boyce Thompson, Oscar S.Straus, James Duncan, and Frederick C. Howe, who wrote Confessions

of a Monopolist, the rule book by which monopolists could controlsociety. The Treasurer was George P. Whalen, vice president of Vacuum

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Oil Company. Congress was represented by Senator William Edgar Borah and Senator John Sharp Williams, of the Senate Foreign RelationsCommittee; Senator William N. Calder; and Senator Robert L. Owen,chairman of the Banking and Currency Committee. House members

were Henry R. Cooper and Henry D. Flood, chairman of the HouseForeign Affairs Committee. American business was represented byHenry Ford; Charles A. Coffin, chairman of the board of GeneralElectric Company; and M. A. Oudin, then foreign manager of GeneralElectric. George P. Whalen represented Vacuum Oil Company, andDaniel Willard was president of the Baltimore & Ohio Railroad. Themore overtly revolutionary element was represented by Mrs. RaymondRobins, whose name was later found to be prominent in the Soviet

Bureau files and in the Lusk Committee hearings; Henry L. Slobodin,described as a "prominent patriotic socialist"; and Lincoln Steffens, adomestic Communist of note.

In other words, this was a hybrid executive committee; it representeddomestic revolutionary elements, the Congress of the United States, andfinancial interests prominently involved with Russian affairs.

Approved by the executive committee was a program that emphasized

the establishment of an official Russian division in the U.S. government"directed by strong men." This division would enlist the aid of universities, scientific organizations, and other institutions to study the"Russian question," would coordinate and unite organizations within theUnited States "for the safeguarding of Russia," would arrange for a"special intelligence committee for the investigation of the Russianmatter," and, generally, would itself study and investigate what wasdeemed to be the "Russian question." The executive committee then

 passed a resolution supporting President Woodrow Wilson's message tothe Soviet congress in Moscow and the league affirmed its own supportfor the new Soviet Russia.

A few weeks later, on May 20, 1918, Frank J. Goodnow and Herbert A.Carpenter, representing the league, called upon Assistant Secretary of 

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State William Phillips and impressed upon him the necessity for establishing an "official Russian Division of the Government tocoordinate all Russian matters. They asked me [wrote Phillips] whether they should take this matter up with the President."5

Phillips reported this directly to the secretary of state and on the next daywrote Charles R. Crane in New York City requesting his views on theAmerican League to Aid and Cooperate with Russia. Phillips besoughtCrane, "I really want your advice as to how we should treat theleague .... We do not want to stir up trouble by refusing to cooperatewith them. On the other hand it is a queer committee and I don't quite'get it.'"6

In early June there arrived at the State Department a letter from WilliamFranklin Sands of American International Corporation for Secretary of State Robert Lansing. Sands proposed that the United States appoint anadministrator in Russia rather than a commission, and opined that "thesuggestion of an allied military force in Russia at the present momentseems to me to be a very dangerous one."7 Sands emphasized the possibility of trade with Russia and that this possibility could beadvanced "by a well chosen administrator enjoying the full confidence

of the government"; he indicated that "Mr. Hoover" might fit the role.8 

The letter was passed to Phillips by Basil Miles, a former associate of Sands, with the expression, "I think the Secretary would find itworthwhile to look through."

In early June the War Trade Board, subordinate to the State Department, passed a resolution, and a committee of the board comprising Thomas L.Chadbourne (Professor Lomonossoff's contact), Clarence M. Woolley,and John Foster Dulles submitted a memorandum to the Department of State, urging consideration of ways and means "to bring about closer andmore friendly commercial relations between the United States andRussia." The board recommended a mission to Russia and reopened thequestion whether this should result from an invitation from the Sovietgovernment.

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Then on June 10, M. A. Oudin, foreign manager of General ElectricCompany, expressed his views on Russia and clearly favored a"constructive plan for the economic assistance" of Russia.9 In August1918 Cyrus M. McCormick of International Harvester wrote to Basil

Miles at the State Department and praised the President's program for Russia, which McCormick thought would be "a golden opportunity."10

Consequently, we find in mid-1918 a concerted effort by a segment of American business — obviously prepared to open up trade — to takeadvantage of its own preferred position regarding the Soviets.

GERMANY AND THE UNITED STATES STRUGGLE FOR 

RUSSIAN BUSINESS

In 1918 such assistance to the embryonic Bolshevik regime was justifiedon the grounds of defeating Germany and inhibiting Germanexploitation of Russia. This was the argument used by W. B. Thompsonand Raymond Robins in sending Bolshevik revolutionaries and propaganda teams into Germany in 1918. The argument was alsoemployed by Thompson in 1917 when conferring with Prime Minister 

Lloyd George about obtaining British support for the emergingBolshevik regime. In June 1918 Ambassador Francis and his staff returned from Russia and urged President Wilson "to recognize and aidthe Soviet government of Russia."11 These reports made by the embassystaff to the State Department were leaked to the press and widely printed. Above all, it was claimed that delay in recognizing the SovietUnion would aid Germany "and helps the German plan to foster reactionand counter-revolution."12 Exaggerated statistics were cited to supportthe proposal — for example, that the Soviet government representedninety percent of the Russian people "and the other ten percent is theformer propertied and governing class .... Naturally they aredispleased."13 A former American official was quoted as saying, "If wedo nothing — that is, if we just let things drift — we help weaken theRussian Soviet Government. And that plays Germany's game."14 So, it

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was recommended that "a commission armed with credit and good business advice could help much."

Meanwhile, inside Russia the economic situation had become critical

and the inevitability of an embrace with capitalism dawned on theCommunist Party and its planners. Lenin crystallized this awareness before the Tenth Congress of the Russian Communist Party:

Without the assistance of capital it will be impossible for us to retain proletarian power in an incredibly ruined country in which the peasantry,also ruined, constitutes the overwhelming majority — and, of course, for this assistance capital will squeeze hundreds per cent out of us. This iswhat we have to understand. Hence, either this type of economicrelations or nothing ....15

Then Leon Trotsky was quoted as saying, "What we need here is anorganizer like Bernard M. Baruch."16

Soviet awareness of its impending economic doom suggests thatAmerican and German business was attracted by the opportunity of exploiting the Russian market for needed goods; the Germans, in fact,

made an early start in 1918. The first deals made by the Soviet Bureau in New York indicate that earlier American financial and moral support of the Bolsheviks was paying off in the form of contracts.

The largest order in 1919-20 was contracted to Morris & Co., Chicagomeatpackers, for fifty million pounds of food products, valued atapproximately $10 million. The Morris meatpacking family was relatedto the Swift family. Helen Swift, later connected with the AbrahamLincoln Center "Unity," was married to Edward Morris (of the

meatpacking firm) and was also the brother of Harold H. Swift, a"major" in the 1917 Thompson Red Cross Mission to Russia.

Table: CONTRACTS MADE IN 1919 BY THE SOVIET BUREAUWITH U.S. FIRMS

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Ludwig Martens was formerly vice president of Weinberg & Posner,located at 120 Broadway, New York City, and this firm was given a $3million order.

SOVIET GOLD AND AMERICAN BANKS

Gold was the only practical means by which the Soviet Union could payfor its foreign purchases and the international bankers were quite willingto facilitate Soviet gold shipments. Russian gold exports, primarilyimperial gold coins, started in early 1920, to Norway and Sweden. Thesewere transshipped to Holland and Germany for other world destinations,

including the United States.

In August 1920, a shipment of Russian gold coins was received at theDen Norske Handelsbank in Norway as a guarantee for payment of 3,000 tons of coal by Niels Juul and Company in the U.S. in behalf of the Soviet government. These coins were transferred to the Norges Bank for safekeeping. The coins were examined and weighed, were found tohave been minted before the outbreak of war in 1914, and were therefore

genuine imperial Russian coins.

17

Shortly after this initial episode, the Robert Dollar Company of SanFrancisco received gold bars, valued at thirty-nine million Swedishkroner, in its Stockholm account; the gold "bore the stamp of the oldCzar Government of Russia." The Dollar Company agent in Stockholmapplied to the American Express Company for facilities to ship the goldto the United States. American Express refused to handle the shipment.Robert Dollar, it should be noted, was a director of American

International Company; thus AIC was linked to the first attempt atshipping gold direct to America.18

Simultaneously it was reported that three ships had left Reval on theBaltic Sea with Soviet gold destined for the U.S. The S.S. Gauthod 

loaded 216 boxes of gold under the supervision of Professor 

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Lomonossoff — now returning to the United States. The S.S. Carl Line

loaded 216 boxes of gold under the supervision of three Russian agents.The S.S. Ruheleva was laden with 108 boxes of gold. Each boxcontained three poods of gold valued at sixty thousand gold rubles each.

This was followed by a shipment on the S.S. Wheeling Mold.

Kuhn, Loeb & Company, apparently acting in behalf of Guaranty TrustCompany, then inquired of the State Department concerning the officialattitude towards the receipt of Soviet gold. In a report the departmentexpressed concern because if acceptance was refused, then "the gold[would] probably come back on the hands of the War Department,causing thereby direct governmental responsibility and increased

embarrassment."

19

The report, written by Merle Smith in conferencewith Kelley and Gilbert, argues that unless the possessor has definiteknowledge as to imperfect title, it would be impossible to refuseacceptance. It was anticipated that the U.S. would be requested to meltthe gold in the assay office, and it was thereupon decided to telegraphKuhn, Loeb & Company that no restrictions would be imposed on theimportation of Soviet gold into the United States.

The gold arrived at the New York Assay Office and was deposited not

 by Kuhn, Loeb & Company — but by Guaranty Trust Company of NewYork City. Guaranty Trust then inquired of the Federal Reserve Board,which in turn inquired of the U.S. Treasury, concerning acceptance and payment. The superintendent of the New York Assay Office informedthe Treasury that the approximately seven million dollars of gold had noidentifying marks and that "the bars deposited have already been meltedin United States mint bars." The Treasury suggested that the FederalReserve Board determine whether Guaranty Trust Company had acted

"for its own account, or the account of another in presenting the gold,"and particularly "whether or not any transfer of credit or exchangetransaction has resulted from the importation or deposit of the gold."20

On November 10, 1920, A. Breton, a vice president of the GuarantyTrust, wrote to Assistant Secretary Gilbert of the Treasury Department

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complaining that Guaranty had not received from the assay office theusual immediate advance against deposits of "yellow metal left withthem for reduction." The letter states that Guaranty Trust had receivedsatisfactory assurances that the bars were the product of melting French

and Belgium coins, although it had purchased the metal in Holland. Theletter requested that the Treasury expedite payment for the gold. In replythe Treasury argued that it "does not purchase gold tendered to theUnited States mint or assay offices which is known or suspected to be of Soviet origin," and in view of known Soviet sales of gold in Holland, thegold submitted by Guaranty Trust Company was held to be a "doubtfulcase, with suggestions of Soviet origin." It suggested that the GuarantyTrust Company could withdraw the gold from the assay office at any

time it wished or could "present such further evidence to the Treasury,the Federal Reserve Bank of New York or the Department of State asmay be necessary to clear the gold of any suspicion of Soviet origin."21

There is no file record concerning final disposition of this case but presumably the Guaranty Trust Company was paid for the shipment.Obviously this gold deposit was to implement the mid-1920 fiscalagreement between Guaranty Trust and the Soviet government under which the company became the Soviet agent in the United States (see

epigraph to this chapter).

It was determined at a later date that Soviet gold was also being sent tothe Swedish mint. The Swedish mint "melts Russian gold, assays it andaffixes the Swedish mint stamp at the request of Swedish banks or other Swedish subjects owing the gold."22 And at the same time Olof Aschberg, head of Svenska Ekonomie A/B (the Soviet intermediary andaffiliate of Guaranty Trust), was offering "unlimited quantities of 

Russian gold" through Swedish banks.23

In brief, we can tie American International Corporation, the influentialProfessor Lomonossoff, Guaranty Trust, and Olof Aschberg (whomwe've previously identified) to the first attempts to import Soviet goldinto the United States.

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MAX MAY OF GUARANTY TRUST BECOMES DIRECTOR OF

RUSKOMBANK 

Guaranty Trust's interest in Soviet Russia was renewed in 1920 in theform of a letter from Henry C. Emery, assistant manager of the ForeignDepartment of Guaranty Trust, to De Witt C. Poole in the StateDepartment. The letter was dated January 21, 1920, just a few weeks before Allen Walker, the manager of the Foreign Department, becameactive in forming the virulent anti-Soviet organization United Americans(see page 165). Emery posed numerous questions about the legal basisof the Soviet government and banking in Russia and inquired whether 

the Soviet government was the de facto government in Russia.

24

"Revolt before 1922 planned by Reds," claimed United Americans in 1920, butGuaranty Trust had started negotiations with these same Reds and wasacting as the Soviet agent in the U.S. in mid-1920.

In January 1922 Secretary of Commerce Herbert Hoover, intercededwith the State Department in behalf of a Guaranty Trust scheme to set upexchange relations with the "New State Bank at Moscow." This scheme,wrote Herbert Hoover, "would not be objectionable if a stipulation were

made that all monies coming into their possession should be used for the purchase of civilian commodities in the United States"; and after asserting that such relations appeared to be in line with general policy,Hoover added, "It might be advantageous to have these transactionsorganized in such a manner that we know what the movement is insteadof disintegrated operations now current."25 Of course, such"disintegrated operations" are consistent with the operations of a freemarket, but this approach Herbert Hoover rejected in favor of channeling

the exchange through specified and controllable sources in New York.Secretary of State Charles E. Hughes expressed dislike of the Hoover-Guaranty Trust scheme, which he thought could be regarded as de factorecognition of the Soviets while the foreign credits acquired might beused to the disadvantage of the United States.26 A noncommittal replywas sent by State to Guaranty Trust. However, Guaranty went ahead

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(with Herbert Hoover's support),27 participated in formation of the firstSoviet international bank, and Max May of Guaranty Trust became headof the foreign department of the new Ruskombank.28

Footnotes:

1U.S. State Dept. Decimal File, 861.00/3094.

2This section is from U.S., Senate, Russian Propaganda, hearings beforea subcommittee of the Committee on Foreign Relations, 66th Cong., 2dsess., 1920.

3Morris Hillquit was the intermediary between New York banker Eugene Boissevain and John Reed in Petrograd.

4U.S. State Dept. Decimal File, 861.00/4214a.

5Ibid., 861.00/1938.

6Ibid.

7Ibid., 861.00/2003.

8Ibid.

9Ibid., 861.00/2002.

10Ibid.

11Ibid., M 316-18-1306.

12Ibid.

13Ibid.

14Ibid.

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15V. 1. Lenin, Report to the Tenth Congress of the Russian CommunistParty, (Bolshevik), March 15, 1921.

16William Reswick, I Dreamt Revolution (Chicago: Henry Regnery,

1952), p. 78.17U.S. State Dept. Decimal File, 861.51/815.

18Ibid., 861.51/836.

19Ibid., 861.51,/837, October 4, 1920.

20Ibid., 861.51/837, October 24, 1920.

21Ibid., 861.51/853, November 11, 1920.

22Ibid., 316-119, 1132.

23Ibid., 316-119-785. This report has more data on transfers of Russiangold through other countries and intermediaries. See also 316-119-846.

24Ibid., 861.516/86

Chapter X

J.P. MORGAN GIVES A LITTLE HELP TO THE OTHER SIDE

I would not sit down to lunch with a Morgan — except possibly to

learn something of his motives and attitudes.

William E. Dodd, Ambassador Dodd's Diary, 1933-1938

So far our story has revolved around a single major financial house — Guaranty Trust Company, the largest trust company in the United States

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and controlled by the J.P. Morgan firm. Guaranty Trust used Olof Aschberg, the Bolshevik banker, as its intermediary in Russia before andafter the revolution. Guaranty was a backer of Ludwig Martens and hisSoviet Bureau, the first Soviet representatives in the United States. And

in mid-1920 Guaranty was the Soviet fiscal agent in the U.S.; the firstshipments of Soviet gold to the United States also traced back toGuaranty Trust.

There is a startling reverse side to this pro-Bolshevik activity — Guaranty Trust was a founder of United Americans, a virulent anti-Soviet organization which noisily threatened Red invasion by 1922,claimed that $20 million of Soviet funds were on the way to fund Red

revolution, and forecast panic in the streets and mass starvation in NewYork City. This duplicity raises, of course, serious questions about theintentions of Guaranty Trust and its directors. Dealing with the Soviets,even backing them, can be explained by apolitical greed or simply profitmotive. On the other hand, spreading propaganda designed to create fear and panic while at the same time encouraging the conditions that giverise to the fear and panic is a considerably more serious problem. Itsuggests utter moral depravity. Let's first look more closely at the anti-Communist United Americans.

UNITED AMERICANS FORMED TO FIGHT COMMUNISM1

In 1920 the organization United Americans was founded. It was limitedto citizens of the United States and planned for five million members,"whose sole purpose would be to combat the teachings of the socialists,communists, I.W.W., Russian organizations and radical farmerssocieties."

In other words, United Americans was to fight all those institutions andgroups believed to be anticapitalist.

The officer's of the preliminary organization established to build upUnited Americans were Allen Walker of the Guaranty Trust Company;

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Daniel Willard, president of the Baltimore 8c Ohio Railroad; H. H.Westinghouse, of Westinghouse Air Brake Company; and Otto H. Kahn,of Kuhn, Loeb 8c Company and American International Corporation.These Wall Streeters were backed up by assorted university presidents

arid Newton W. Gilbert (former governor of the Philippines). Obviously,United Americans was, at first glance, exactly the kind of organizationthat establishment capitalists would be expected to finance and join. Itsformation should have brought no great surprise.

On the other hand, as we have already seen, these financiers were alsodeeply involved in supporting the new Soviet regime in Russia — although this support was behind the scenes, recorded only in

government files, and not to be made public for 50 years. As part of United Americans, Walker, Willard, Westinghouse, and Kahn were playing a double game. Otto H. Kahn, a founder of the anti-Communistorganization, was reported by the British socialist J. H. Thomas ashaving his "face towards the light." Kahn wrote the preface to Thomas's book. In 1924 Otto Kahn addressed the League for Industrial Democracyand professed common objectives with this activist socialist group (see page 49). The Baltimore & Ohio Railroad (Willard's employer) wasactive in the development of Russia during the 1920s. Westinghouse in

1920, the year United Americans was founded, was operating a plant inRussia that had been exempted from nationalization. And the role of Guaranty Trust has already been minutely described.

UNITED AMERICANS REVEALS "STARTLING

DISCLOSURES" ON REDS

In March 1920 the New York Times headlined an extensive, detailedscare story about Red invasion of the United States within two years, aninvasion which was to be financed by $20 million of Soviet funds"obtained by the murder and robbery of the Russian nobility."2

United Americans had, it was revealed, made a survey of "radicalactivities" in the United States, and had done so in its role as an

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organization formed to "preserve the Constitution of the United Stateswith the representative form of government and the right of individual possession which the Constitution provides."

Further, the survey, it was proclaimed, had the backing of the executive board, "including Otto H. Kahn, Allen Walker of the Guaranty TrustCompany, Daniel Willard," and others. The survey asserted that

the radical leaders are confident of effecting a revolution within twoyears, that the start is to be made in New York City with a general strike,that Red leaders have predicted much bloodshed and that the RussianSoviet Government has contributed $20,000,000 to the American radicalmovement.

The Soviet gold shipments to Guaranty Trust in mid-1920 (540 boxes of three poods each) were worth roughly $15,000,000 (at $20 a troyounce), and other gold shipments through Robert Dollar and Olof Aschberg brought the total very close to $20 million. The informationabout Soviet gold for the radical movement was called "thoroughlyreliable" and was "being turned over to the Government." The Reds, itwas asserted, planned to starve New York into submission within four 

days:Meanwhile the Reds count on a financial panic within the next fewweeks to help their cause along. A panic would cause distress among theworkingmen and thus render them more susceptible to revolutiondoctrine.

The United Americans' report grossly overstated the number of radicalsin the United States, at first tossing around figures like two or five

million and then settling for precisely 3,465,000 members in four radicalorganizations. The report concluded by emphasizing the possibility of  bloodshed and quoted "Skaczewski, President of the InternationalPublishing Association, otherwise the Communist Party, [who] boastedthat.the time was coming soon when the Communists would destroyutterly the present form of society."

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In brief, United Americans published a report without substantiatingevidence, designed to scare the man in the street into panic: Thesignificant point of course is that this is the same group that wasresponsible for protecting and subsidizing, indeed assisting, the Soviets

so they could undertake these same plans.

CONCLUSIONS CONCERNING UNITED AMERICANS

Is this a case of the right hand not knowing what the left hand wasdoing? Probably not. We are talking about heads of companies,eminently successful companies at that. So United Americans was probably a ruse to divert public — and official — attention from thesubterranean efforts being made to gain entry to the Russian market.

United Americans is the only documented example known to this writer of an organization assisting the Soviet regime and also in the forefront of opposition to the Soviets. This is by no means an inconsistent course of action, and further research should at least focus on the followingaspects:

(a) Are there other examples of double-dealing by influential groupsgenerally known as the establishment?

(b) Can these examples be extended into other areas? For example, isthere evidence that labor troubles have been instigated by these groups?

(c) What is the ultimate purpose of these pincer tactics? Can they berelated to the Marxian axiom: thesis versus antithesis yields synthesis? Itis a puzzle why the Marxist movement would attack capitalism head-on

if its objective was a Communist world and if it truly accepted thedialectic. If the objective is a Communist world — that is, if communism is the desired synthesis — and capitalism is the thesis, thensomething apart from capitalism or communism has to be antithesis.Could therefore capitalism be the thesis and communism the antithesis,with the objective of the revolutionary groups and their backers being a

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synthesizing of these two systems into some world system yetundescribed?

MORGAN AND ROCKEFELLER AID KOLCHAK 

Concurrently with these efforts to aid the Soviet Bureau and UnitedAmericans, the J.P. Morgan firm, which controlled Guaranty Trust, was providing financial assistance for one of the Bolshevik's primaryopponents, Admiral Aleksandr Kolchak in Siberia. On June 23, 1919,Congressman Mason introduced House Resolution 132 instructing theState Department "to make inquiry as to all and singular as to the truthof . . . press reports" charging that Russian bondholders had used their influence to bring about the "retention of American troops in Russia" inorder to ensure continued payment of interest on Russian bonds.According to a file memorandum by Basil Miles, an associate of William F. Sands, Congressman Mason charged that certain banks wereattempting to secure recognition of Admiral Kolchak in Siberia to get payment on former Russian bonds.

Then in August 1919 the secretary of state, Robert Lansing, received

from the Rockefeller-influenced National City Bank of New York aletter requesting official comment on a proposed loan of $5 million toAdmiral Kolchak; and from J.P. Morgan & Co. and other bankersanother letter requesting the views of the department concerning anadditional proposed £10 million sterling loan to Kolchak by aconsortium of British and American bankers.3

Secretary Lansing informed the bankers that the U.S. had not recognizedKolchak and, although prepared to render him assistance, "the

Department did not feel it could assume the responsibility of encouraging such negotiations but that, nevertheless, there seemed to beno objection to the loan provided the bankers deemed it advisable tomake it."4

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Subsequently, on September 30, Lansing informed the American consulgeneral at Omsk that the "loan has since gone through in regular course"5 Two fifths was taken up by British banks and three fifths byAmerican banks. Two thirds of the total was to be spent in Britain and

the United States and the remaining one third wherever the Kolchak Government wished. The loan was secured by Russian gold (Kolchak's)that was shipped to San Francisco. The timing of the previouslydescribed Soviet exports of gold suggests that cooperation with theSoviets on gold sales was determined on the heels of the Kolchak gold-loan agreement.

The Soviet gold sales and the Kolchak loan also suggest that Carroll

Quigley's statement that Morgan interests infiltrated the domestic leftapplied also to overseas revolutionary and counterrevolutionarymovements. Summer 1919 was a time of Soviet military reverses in theCrimea and the Ukraine and this black picture may have induced Britishand American bankers to mend their fences with the anti-Bolshevik forces. The obvious rationale would be to have a foot in all camps, andso be in a favorable position to negotiate for concessions and businessafter the revolution or counterrevolution had succeeded and a newgovernment stabilized. As the outcome of any conflict cannot be seen at

the start, the idea is to place sizable bets on all the horses in therevolutionary race. Thus assistance was given on the one hand to theSoviets and on the other to Kolchak — while the British governmentwas supporting Denikin in the Ukraine and the French government wentto the aid of the Poles.

In autumn 1919 the Berlin newspaper  Berliner Zeitung am Mittak 

(October 8 and 9) accused the Morgan firm of financing the West

Russian government and the Russian-German forces in the Balticfighting the Bolsheviks — both allied to Kolchak. The Morgan firmstrenuously denied the charge: "This firm has had no discussion, or meeting, with the West Russian Government or with anyone pretendingto represent it, at any time."6 But if the financing charge was inaccuratethere is evidence of collaboration. Documents found by Latvian

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government intelligence among the papers of Colonel Bermondt,commander of the Western Volunteer Army, confirm "the relationsclaimed existing between Kolchak's London Agent and the Germanindustrial ring which was back of Bermondt."7

In other words, we know that J.P. Morgan, London, and New. York  bankers financed Kolchak. There is also evidence that connects Kolchak and his army with other anti-Bolshevik armies. And there seems to belittle question that German industrial and banking circles were financingthe all-Russian anti-Bolshevik army in the Baltic. Obviously bankers'funds have no national flag.

Footnotes:

1 New York Times, June 21, 1919.

2Ibid., March 28, 1920.

3U.S. State Dept. Decimal File, 861.51/649.

4

Ibid., 861.51/6755Ibid., 861.51/656

6Ibid., 861.51/767 — a letter from J. P. Morgan to Department of State, November 11, 1919. The financing itself was a hoax (see AP report inState Department files following the Morgan letter).

7Ibid., 861.51/6172 and /6361.

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Chapter XI

THE ALLIANCE OF BANKERS AND REVOLUTION

The name Rockefeller does not connote a revolutionary, and my life

situation has fostered a careful and cautious attitude that verges on

conservatism. I am not given to errant causes...

 John D. Rockefeller III, The Second American Revolution (New York:

 Harper & Row. 1973)

THE EVIDENCE PRESENTED: A SYNOPSIS

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Evidence already published by George Katkov, Stefan Possony, andMichael Futrell has established that the return to Russia of Lenin and his party of exiled Bolsheviks, followed a few weeks later by a party of Mensheviks, was financed and organized by the German government.1

The necessary funds were transferred in part through the Nya Banken inStockholm, owned by Olof Aschberg, and the dual German objectiveswere: (a) removal of Russia from the war, and (b) control of the postwar Russian market.2

We have now gone beyond this evidence to establish a continuingworking relationship between Bolshevik banker Olof Aschberg and theMorgan-controlled Guaranty Trust Company in New York before,

during, and after the Russian Revolution. In tsarist times Aschberg wasthe Morgan agent in Russia and negotiator for Russian loans in theUnited States; during 1917 Aschberg was financial intermediary for therevolutionaries; and after the revolution Aschberg became head of Ruskombank, the first Soviet international bank, while Max May, a vice president of the Morgan-controlled Guaranty Trust, became director andchief of the Ruskom-bank foreign department. We have presenteddocumentary evidence of a continuing working relationship between theGuaranty Trust Company and the Bolsheviks. The directors of Guaranty

Trust in 1917 are listed in Appendix 1.

Moreover, there is evidence of transfers of funds from Wall Street bankers to international revolutionary activities. For example, there isthe statement (substantiated by a cablegram) by William BoyceThompson — a director of the Federal Reserve Bank of New York, alarge stockholder in the Rockefeller-controlled Chase Bank, and afinancial associate of the Guggenheims and the Morgans — that he

(Thompson) contributed $1 million to the Bolshevik Revolution for  propaganda purposes. Another example is John Reed, the Americanmember of the Third International executive committee who wasfinanced and supported by Eugene Boissevain, a private New York  banker, and who was employed by Harry Payne Whitney's Metropolitan

magazine. Whitney was at that time a director of Guaranty Trust. We

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Corporation. In the sedition case of Robert Minor there are strongindications and some circumstantial evidence that Colonel EdwardHouse intervened to have Minor released. The significance of the Minor case is that William B. Thompson's program for Bolshevik revolution in

Germany was the very program Minor was implementing when arrestedin Germany.

Some international agents, for example Alexander Gumberg, worked for Wall Street and the Bolsheviks. In 1917 Gumberg was the representativeof a U.S. firm in Petrograd, worked for Thompson's American RedCross Mission, became chief Bolshevik agent in Scandinavia until hewas deported from Norway, then became confidential assistant to Reeve

Schley of Chase Bank in New York and later to Floyd Odium of AtlasCorporation.

This activity in behalf of the Bolsheviks originated in large part from asingle address: 120 Broadway, New York City. The evidence for thisobservation is outlined but no conclusive reason is given for the unusualconcentration of activity at a single address, except to state that itappears to be the foreign counterpart of Carroll Quigley's claim that J.P.Morgan infiltrated the domestic left. Morgan also infiltrated the

international left.

The Federal Reserve Bank of New York was at 120 Broadway. Thevehicle for this pro-Bolshevik activity was American InternationalCorporation — at 120 Broadway. AIC views on the Bolshevik regimewere requested by Secretary of State Robert Lansing only a few weeksafter the revolution began, and Sands, executive secretary of AIC, could barely restrain his enthusiasm for the Bolshevik cause. Ludwig Martens,the Soviet's first ambassador, had been vice president of Weinberg &Posner, which was also located at 120-Broadway. Guaranty TrustCompany was next door at 140 Broadway but Guaranty Securities Co.was at 120 Broadway. In 1917 Hunt, Hill & Betts was at 120 Broadway,and Charles B. Hill of this firm was the negotiator in the Sun Yat-sendealings. John MacGregor Grant Co., which was financed by Olof 

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Aschberg in Sweden and Guaranty Trust in the United States, and whichwas on the Military Intelligence black list, was at 120 Broadway. TheGuggenheims and the executive heart of General Electric (also interestedin American International) were at 120 Broadway. We find it therefore

hardly surprising that the Bankers Club was also at 120 Broadway, onthe top floor (the thirty-fourth).

It is significant that support for the Bolsheviks did not cease withconsolidation of the revolution; therefore, this support cannot be whollyexplained in terms of the war with Germany. The American-Russiansyndicate formed in 1918 to obtain concessions in Russia was backed bythe White, Guggenheim, and Sinclair interests. Directors of companies

controlled by these three financiers included Thomas W. Lamont(Guaranty Trust), William Boyce Thompson (Federal Reserve Bank),and John Reed's employer Harry Payne Whitney (Guaranty Trust). Thisstrongly suggests that the syndicate was formed to cash in on earlier support for the Bolshevik cause in the revolutionary period. And then wefound that Guaranty Trust financially backed the Soviet Bureau in NewYork in 1919.

The first really concrete signal that previous political and financial

support was paying off came in 1923 when the Soviets formed their firstinternational bank, Ruskombank. Morgan associate Olof Aschberg became nominal head of this Soviet bank; Max May, a vice president of Guaranty Trust, became a director of Ruskom-bank, and theRuskombank promptly appointed Guaranty Trust Company its U.S.agent.

THE EXPLANATION FOR THE UNHOLY ALLIANCE

What motive explains this coalition of capitalists and Bolsheviks?

Russia was then — and is today — the largest untapped market in theworld. Moreover, Russia, then and now, constituted the greatest potential competitive threat to American industrial and financial

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supremacy. (A glance at a world map is sufficient to spotlight thegeographical difference between the vast land mass of Russia and thesmaller United States.) Wall Street must have cold shivers when itvisualizes Russia as a second super American industrial giant.

But why allow Russia to become a competitor and a challenge to U.S.supremacy? In the late nineteenth century, Morgan/Rockefeller, andGuggenheim had demonstrated their monopolistic proclivities. In Railroads and Regulation 1877-1916 Gabriel Kolko has demonstratedhow the railroad owners, not the farmers, wanted state control of railroads in order to preserve their monopoly and abolish competition.So the simplest explanation of our evidence is that a syndicate of Wall

Street financiers enlarged their monopoly ambitions and broadenedhorizons on a global scale. The gigantic Russian market was to be

converted into a captive market and a technical colony to be exploited 

by a few high-powered American financiers and the corporations under 

their control. What the Interstate Commerce Commission and theFederal Trade Commission under the thumb of American industry couldachieve for that industry at home, a planned socialist government couldachieve for it abroad — given suitable support and inducements fromWall Street and Washington, D.C.

Finally, lest this explanation seem too radical, remember that it wasTrotsky who appointed tsarist generals to consolidate the Red Army;that it was Trotsky who appealed for American officers to controlrevolutionary Russia and intervene in behalf of the Soviets; that it wasTrotsky who squashed first the libertarian element in the RussianRevolution and then the workers and peasants; and that recorded historytotally ignores the 700,000-man Green Army composed of ex-

Bolsheviks, angered at betrayal of the revolution, who fought the Whitesand the Reds. In other words, we are suggesting that the Bolshevik Revolution was an alliance of statists: statist revolutionaries and statistfinanciers aligned against the genuine revolutionary libertarian elementsin Russia.3

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'The question now in the readers' minds must be, were these bankers alsosecret Bolsheviks? No, of course not. The financiers were withoutideology. It would be a gross misinterpretation to assume that assistancefor the Bolshevists was ideologically motivated, in any narrow sense.

The financiers were power-motivated and therefore assisted any politicalvehicle that would give them an entree to power: Trotsky, Lenin, thetsar, Kolchak, Denikin — all received aid, more or less. All, that is, butthose who wanted a truly free individualist society.

 Neither was aid restricted to statist Bolsheviks and statist counter-Bolsheviks. John P. Diggins, in Mussolini and Fascism: The View from

 America,4 has noted in regard to Thomas Lamont of Guaranty Trust that

Of all American business leaders, the one who most vigorously patronized the cause of Fascism was Thomas W. Lamont. Head of the powerful J.P. Morgan banking network, Lamont served as something of a business consultant for the government of Fascist Italy.

Lamont secured a $100 million loan for Mussolini in 1926 at a particularly crucial time for the Italian dictator. We might remember toothat the director of Guaranty Trust was the father of Corliss Lamont, a

domestic Communist. This evenhanded approach to the twin totalitariansystems, communism and fascism, was not confined to the Lamontfamily. For example, Otto Kahn, director of American InternationalCorporation and of Kuhn, Leob & Co., felt sure that "American capitalinvested in Italy will find safety, encouragement, opportunity andreward."5 This is the same Otto Kahn who lectured the socialist Leagueof Industrial Democracy in 1924 that its objectives were his objectives.6 

They differed only — according to Otto Kahn — over the means of achieving these objectives.

Ivy Lee, Rockefeller's public relations man, made similar  pronouncements, and was responsible for selling the Soviet regime tothe gullible American public in the late 1920s. We also have observedthat Basil Miles, in charge of the Russian desk at the State Departmentand a former associate of William Franklin Sands, was decidedly helpful

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to the businessmen promoting Bolshevik causes; but in 1923 the sameMiles authored a profascist article, "Italy's Black Shirts and Business."7

"Success of the Fascists is an expression of Italy's youth," wrote Mileswhile glorifying the fascist movement and applauding its esteem for 

American business.

THE MARBURG PLAN

The Marburg Plan, financed by Andrew Carnegie's ample heritage, was produced in the early years of the twentieth century. It suggests premeditation for this kind of superficial schizophrenia, which in factmasks an integrated program of power acquisition: "What then if Carnegie and his unlimited wealth, the international financiers and theSocialists could be organized in a movement to compel the formation of a league to enforce peace."8

The governments of the world, according to the Marburg Plan, were to be socialized while the ultimate power would remain in the hands of theinternational financiers "to control its councils and enforce peace [andso] provide a specific for all the political ills of mankind."9

This idea was knit with other elements with similar objectives. LordMilner in England provides the transatlantic example of bankinginterests recognizing the virtues and possibilities of Marxism. Milner was a banker, influential in British wartime policy, and pro-Marxist.10 In New York the socialist "X" club was founded in 1903. It counted amongits members not only the Communist Lincoln Steffens, the socialistWilliam English Walling, and the Communist banker Morris Hillquit, but also John Dewey, James T. Shotwell, Charles Edward Russell, and

Rufus Weeks (vice president of New York Life Insurance Company).The annual meeting of the Economic Club in the Astor Hotel, NewYork, witnessed socialist speakers. In 1908, when A. Barton Hepburn, president of Chase National Bank, was president of the Economic Club,the main speaker was the aforementioned Morris Hillquit, who "had

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abundant opportunity to preach socialism to a gathering whichrepresented wealth and financial interests."11

From these unlikely seeds grew the modern internationalist movement,

which included not only the financiers Carnegie, Paul Warburg, OttoKahn, Bernard Baruch, and Herbert Hoover, but also the CarnegieFoundation and its progeny International Conciliation. The trustees of Carnegie were, as we have seen, prominent on the board of AmericanInternational Corporation. In 1910 Carnegie donated $10 million tofound the Carnegie Endowment for International Peace, and amongthose on the board of trustees were Elihu Root (Root Mission to Russia,1917), Cleveland H. Dodge (a financial backer of President Wilson),

George W. Perkins (Morgan partner), G. J. Balch (AIC and Amsinck),R. F. Herrick (AIC), H. W. Pritchett (AIC), and other Wall Streetluminaries. Woodrow Wilson came under the powerful influence of — and indeed was financially indebted to — this group of internationalists.As Jennings C. Wise has written, "Historians must never forget thatWoodrow Wilson... made it possible for Leon Trotsky to enter Russiawith an American passport."12

But Leon Trotsky also declared himself an internationalist. We have

remarked with some interest his high-level internationalist connections,or at least friends, in Canada. Trotsky then was not pro-Russian, or pro-Allied, or pro-German, as many have tried to make him out to be.Trotsky was for world revolution, for world dictatorship; he was, in oneword, an internationalist.13 Bolshevists and bankers have then thissignificant common ground — internationalism. Revolution andinternational finance are not at all inconsistent if the result of revolutionis to establish more centralized authority. International finance prefers to

deal with central governments. The last thing the banking communitywants is laissez-faire economy and decentralized power because thesewould disperse power.

This, therefore, is an explanation that fits the evidence. This handful of  bankers and promoters was not Bolshevik, or Communist, or socialist, or 

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Democrat, or even American. Above all else these men wanted markets, preferably captive international markets — and a monopoly of thecaptive world market as the ultimate goal. They wanted markets thatcould be exploited monopolistically without fear of competition from

Russians, Germans, or anyone else — including American businessmenoutside the charmed circle. This closed group was apolitical and amoral.In 1917, it had a single-minded objective — a captive market in Russia,all presented under, and intellectually protected by, the shelter of aleague to enforce the peace.

Wall Street did indeed achieve its goal. American firms controlled bythis syndicate were later to go on and build the Soviet Union, and today

are well on their way to bringing the Soviet military-industrial complexinto the age of the computer.

Today the objective is still alive and well. John D. Rockefeller expoundsit in his book The Second American Revolution — which sports a five- pointed star on the title page.14 The book contains a naked plea for humanism, that is, a plea that our first priority is to work for others. Inother words, a plea for collectivism. Humanism is collectivism. It isnotable that the Rockefellers, who have promoted this humanistic idea

for a century, have not turned their OWN property over to others..Presumably it is implicit in their recommendation that we all work  for 

the Rockefellers. Rockefeller's book promotes collectivism under theguises of "cautious conservatism" and "the public good." It is in effect a plea for the continuation of the earlier Morgan-Rockefeller support of collectivist enterprises and mass subversion of individual rights.

In brief, the public good has been, and is today, used as a device and anexcuse for self-aggrandizement by an elitist circle that pleads for world peace and human decency. But so long as the reader looks at worldhistory in terms of an inexorable Marxian conflict between capitalismand communism, the objectives of such an alliance betweeninternational finance and international revolution remain elusive. So willthe ludicrousness of promotion of the public good by plunderers. If these

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alliances still elude the reader, then he should ponder the obvious factthat these same international interests and promoters are always willingto determine what other  people should do, but are signally unwilling to be first in line to give up their own wealth and power. Their mouths are

open, their pockets are closed.

This technique, used by the monopolists to gouge society, was set forthin the early twentieth century by Frederick C. Howe in The Confessions

of a Monopolist.15 First, says Howe, politics is a necessary part of  business. To control industries it is necessary to control Congress andthe regulators and thus make society go to work for you, the monopolist.So, according to Howe, the two principles of a successful monopolist

are, "First, let Society work for you; and second, make a business of  politics."16 These, wrote Howe, are the basic "rules of big business."

Is there any evidence that this magnificently sweeping objective wasalso known to Congress and the academic world? Certainly the possibility was known and known publicly. For example, witness thetestimony of Albert Rhys Williams, an astute commentator on therevolution, before the Senate Overman Committee:

. . . it is probably true that under the soviet government industrial lifewill perhaps be much slower in development than under the usualcapitalistic system. But why should a great industrial country likeAmerica desire the creation and consequent competition of another greatindustrial rival? Are not the interests of America in this regard in linewith the slow tempo of development which soviet Russia projects for herself?

Senator Wolcott: Then your argument is that it would be to the interest

of America to have Russia repressed?

MR. WILLIAMS: Not repressed ....

SENATOR WOLCOTT: You say. Why should America desire Russia to become an industrial competitor with her?

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MR. WILLIAMS: This is speaking from a capitalistic standpoint. Thewhole interest of America is not, I think, to have another great industrialrival, like Germany, England, France, and Italy, thrown on the market incompetition. I think another government over there besides the Soviet

government would perhaps increase the tempo or rate of development of Russia, and we would have another rival. Of course, this is arguing froma capitalistic standpoint.

SENATOR WOLCOTT: So you are presenting an argument here whichyou think might appeal to the American people, your point being this,that if we recognize the Soviet government of Russia as it is constitutedwe will be recognizing a government that can not compete with us in

industry for a great many years?MR. WILLIAMS: That is a fact.

SENATOR WOLCOTT: That is an argument that under the Sovietgovernment Russia is in no position, for a great many years at least, toapproach America industrially?

MR. WILLIAMS: Absolutely.17

And in that forthright statement by Albert Rhys Williams is the basicclue to the revisionist interpretation of Russian history over the past half century.

Wall Street, or rather the Morgan-Rockefeller complex represented at120 Broadway and 14 Wall Street, had something very close toWilliams' argument in mind. Wall Street went to bat in Washington for the Bolsheviks. It succeeded. The Soviet totalitarian regime survived. In

the 1930s foreign firms, mostly of the Morgan-Rockefeller group, builtthe five-year plans. They have continued to build Russia, economicallyand militarily.18 On the other hand, Wall Street presumably did notforesee the Korean War and the Vietnam War — in which 100,000Americans and countless allies lost their lives to Soviet armaments builtwith this same imported U.S. technology. What seemed a farsighted, and

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undoubtedly profitable, policy for a Wall Street syndicate, became anightmare for millions outside the elitist power circle and the rulingclass.

Footnotes:

1Michael Futrell, Northern Underground (London: Faber and Faber,1963); Stefan Possony, Lenin: The Compulsive Revolutionary (London:George Allen & Unwin, 1966); and George Katkov, "German ForeignOffice Documents on Financial Support to the Bolsheviks in 1917," International Affairs 32 (Royal Institute of International Affairs, 1956).

2Ibid., especially Katkov.

3See also Voline (V.M. Eichenbaum), Nineteen-Seventeen: The Russian

 Revolution Betrayed (New York: Libertarian Book Club, n.d.).

4Princeton, N.J.: Princeton University Prss, 1972.

5Ibid., p. 149.

6See p. 49.

7 Nation's Business, February 1923, pp. 22-23.

8Jennings C. Wise, Woodrow Wilson: Disciple of Revolution (NewYork: Paisley Press, 1938), p.45

9Ibid., p.46

10See p. 89.

11Morris Hillquit, Loose Leaves from a Busy Life (New York:Macmillan, 1934), p. 81.

12Wise, op. cit., p. 647

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13Leon Trotsky, The Bolsheviki and World Peace (New York: Boni &Liveright, 1918).

14In May 1973 Chase Manhattan Bank (chairman, David Rockefeller)

opened it Moscow office at 1 Karl Marx Square, Moscow. The NewYork office is at 1 Chase Manhattan Plaza.

15Chicago: Public Publishin, n.d.

16Ibid.

17U.S., Senate, Bolshevik Propaganda, hearings before a subcommitteeof the Committee on the Judiciary, 65th Cong., pp. 679-80. See also

herein p. 107 for the role of Williams in Radek's Press Bureau.18See Antony C. Sutton, Western Technology and Soviet Economic

 Development, 3 vols. (Stanford, Calif.: Hoover Institution, 1968, 1971,1973); see also National Suicide: Military Aid to the Soviet Union (NewYork: Arlington House, 1973).

Appendix I

DIRECTORS OF MAJOR BANKS,FIRMS, AND INSTITUTIONSMENTIONED IN THIS BOOK (AS IN 1917-1918)

AMERICAN INTERNATIONAL

CORPORATION (120 Broadway)J. Ogden Armour Percy A. Rockefeller  G. J. Baldwin John D. RyanC. A. Coffin W.L. SaundersW. E. Corey J.A. Stillman

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Robert Dollar C.A. StonePierre S. du Pont T.N. VailPhilip A. S. Franklin F.A. VanderlipJ. P. Grace E.S. Webster  R. F. Herrick A.H. WigginOtto H. Kahn Beckman WinthropH. W. Pritchett William Woodward

CHASE NATIONAL BANK J. N. Hill Newcomb Carlton

A. B. Hepburn D.C. JacklingS. H. Miller E.R. Tinker C. M. Schwab A.H. WigginH. Bendicott John J. Mitchell

Guy E. Tripp

EQUITABLE TRUST COMPANY (37-43 WallStreet)Charles B. Alexander Henry E. HuntingtonAlbert B. Boardman Edward T. JeffreyRobert.C. Clowry Otto H. KahnHoward E. Cole Alvin W. KrechHenry E. Cooper James W. LanePaul D. Cravath Hunter S. Marston

Franklin Wm.Cutcheon

Charles G. Meyer 

Bertram Cutler George WelwoodMurray

Thomas de Witt Cuyler Henry H. PierceFrederick W. Fuller Winslow S. Pierce

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Robert Goelet Lyman RhoadesCarl R. Gray Walter C. Teagle

Charles HaydenHenry RogersWinthrop

Bertram G. Work 

FEDERAL ADVISORY COUNCIL (1916)Daniel G. Wing, Boston, District No. 1J. P. Morgan, New York, District No. 2Levi L. Rue, Philadelphia, District No. 3

W. S. Rowe, Cincinnati, District No. 4J. W. Norwood, Greenville, S.C., District

 No. 5C. A. Lyerly, Chattanooga, District No. 6J. B. Forgan, Chicago, Pres., District No.

7Frank O. Watts, St. Louis, District No. 8C. T. Jaffray, Minneapolis, District No. 9

E. F. Swinney, Kansas City, District No.10

T. J. Record, Paris, District No. 11Herbert Fleishhacker, San Francisco,

District No. 12

FEDERAL RESERVE BANK OF NEWYORK (120 Broadway)William Woodward(1917)

Class A

Robert H. Treman(1918)

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Franklin D. Locke(1919) Charles A. Stone(1920)

Class BWm. B. Thompson(1918)L. R. Palmer (1919) Pierre Jay (1917)

Class CGeorge F. Peabody(1919)William LawrenceSaunders (1920)

FEDERAL RESERVE BOARD

William G. M'AdooAdolph C. Miller (1924)

Charles S. Hamlin( 1916)

Frederic A. Delano(1920)

Paul M. Warburg(1918)

W.P.G. Harding (1922)

John Skelton Williams

GUARANTY TRUST COMPANY (140Broadway)Alexander J. Hemphill(Chairman)Charles H. Allen Edgar L. MarstonA. C. Bedford Grayson M-P Murphy

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Edward J. Berwind Charles A. PeabodyW. Murray Crane William C. Potter  T. de Witt Cuyler John S. RunnellsJames B. Duke Thomas F. RyanCaleb C. Dula Charles H. SabinRobert W. Goelet John W. Spoor  Daniel Guggenheim Albert StrausW. Averell Harriman Harry P. WhitneyAlbert H. Harris Thomas E. WilsonWalter D. Hines  London Committee:

Augustus D. JulliardArthur J. Fraser 

(Chairman)Thomas W. Lamont Cecil F. Parr William C. Lane Robert Callander 

 NATIONAL CITY BANK P. A. S. Franklin P.A. Rockefeller  J.P. Grace James StillmanG. H. Dodge W. Rockefeller  H. A. C. Taylor J. O. Armour  R. S. Lovett J.W. SterlingF. A. Vanderlip J.A. StillmanG. H. Miniken M.T. PyneE. P. Swenson E.D. BapstFrank Trumbull J.H. Post

Edgar Palmer W.C. Procter   

 NATIONALBANK FÜR DEUTSCHLAND(As in 1914, Hjalmar Schacht joined board in

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1918)Emil Wittenberg Hans WinterfeldtHjalmar Schacht Th MarbaMartin Schiff Paul Koch

Franz Rintelen

SINCLAIR CONSOLIDATED OILCORPORATION (120 Broadway)Harry F. Sinclair James N. WallaceH. P. Whitney Edward H. Clark  

Wm. E. Corey Daniel C. JacklingWm. B. Thompson Albert H. Wiggin

J. G. WHITE ENGINEERINGCORPORATIONJames Brown C.E. Bailey

Douglas Campbell J.G. WhiteG. C. Clark, Jr. Gano DunnBayard Dominick, Jr. E.G. WilliamsA. G. Hodenpyl A.S. CraneT. W. Lamont H.A. Lardner Marion McMillan G.H. KinniatJ. H. Pardee A.F. KountzG. H. Walbridge R.B. Marchant

E. N. Chilson Henry ParsonsA. N. Connett

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Appendix II

THE JEWISH-CONSPIRACY THEORY OF THE BOLSHEVIK REVOLUTION

There is an extensive literature in English, French, and Germanreflecting the argument that the Bolshevik Revolution was the result of a"Jewish conspiracy"; more specifically, a conspiracy by Jewish world bankers. Generally, world control is seen as the ultimate objective; the

Bolshevik Revolution was but one phase of a wider program thatsupposedly reflects an age-old religious struggle between Christianityand the "forces of darkness."

The argument and its variants can be found in the most surprising placesand from quite surprising persons. In February 1920 Winston Churchillwrote an article — rarely cited today — for the London Illustrated 

Sunday Herald entitled "Zionism Versus Bolshevism." In this' article

Churchill concluded that it was "particularly important... that the National Jews in every country who are loyal to the land of their adoption should come forward on every occasion . . . and take a prominent part in every measure for combatting the Bolshevik conspiracy." Churchill draws a line between "national Jews" and what hecalls "international Jews." He argues that the "international and for the

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most atheistical Jews" certainly had a "very great" role in the creation of Bolshevism and bringing about the Russian Revolution. He asserts(contrary to fact) that with the exception of Lenin, "the majority" of theleading figures in the revolution were Jewish, and adds (also contrary to

fact) that in many cases Jewish interests and Jewish places of worshipwere excepted by the Bolsheviks from their policies of seizure. Churchillcalls the international Jews a "sinister confederacy" emergent from the persecuted populations of countries where Jews have been persecuted onaccount of their race. Winston Churchill traces this movement back toSpartacus-Weishaupt, throws his literary net around Trotsky, Bela Kun,Rosa Luxemburg, and Emma Goldman, and charges: "This world-wideconspiracy for the overthrow of civilisation and for the reconstitution of 

society on the basis of arrested development, of envious malevolence,and impossible equality, has been steadily growing."

Churchill then argues that this conspiratorial Spartacus-Weishaupt grouphas been the mainspring of every subversive movement in the nineteenthcentury. While pointing out that Zionism and Bolshevism are competingfor the soul of the Jewish people, Churchill (in 1920) was preoccupiedwith the role of the Jew in the Bolshevik Revolution and the existence of a worldwide Jewish conspiracy.

Another well-known author in the 1920s, Henry Wickham Steeddescribes in the second volume of his Through 30 Years 1892-1922 (p.302) how he attempted to bring the Jewish-conspiracy concept to theattention of Colonel Edward M. House and President Woodrow Wilson.One day in March 1919 Wickham Steed called Colonel House and foundhim disturbed over Steed's recent criticism of U.S. recognition of theBolsheviks. Steed pointed out to House that Wilson would be discredited

among the many peoples and nations of Europe and "insisted that,unknown to him, the prime movers were Jacob Schiff, Warburg andother international financiers, who wished above all to bolster up theJewish Bolshevists in order to secure a field for German and Jewishexploitation of Russia."1 According to Steed, Colonel House argued for the establishment of economic relations with the Soviet Union.

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Probably the most superficially damning collection of documents on theJewish conspiracy is in the State Department Decimal File(861.00/5339). The central document is one entitled "Bolshevism andJudaism," dated November 13, 1918. The text is in the form of a report,

which states that the revolution in Russia was engineered "in February1916" and "it was found that the following persons and firms wereengaged in this destructive work":

(1) Jacob Schiff Jew(2) Kuhn, Loeb & Company Jewish FirmManagement: Jacob Schiff Jew

Felix Warburg Jew

Otto H. Kahn JewMortimer L.Schiff 

Jew

Jerome J.Hanauer 

Jew

(3) Guggenheim Jew(4) Max Breitung Jew(5) Isaac Seligman Jew

The report goes on to assert that there can be no doubt that the RussianRevolution was started and engineered by this group and that in April1917

Jacob Schiff in fact made a public announcement and it was due to hisfinancial influence that the Russian revolution was successfullyaccomplished and in the Spring 1917 Jacob Schitf started to financeTrotsky, a Jew, for the purpose of accomplishing a social revolution inRussia.

The report contains other miscellaneous information about MaxWarburg's financing of Trotsky, the role of the Rheinish-Westphaliansyndicate and Olof Aschberg of the Nya Banken (Stockholm) together with Jivotovsky. The anonymous author (actually employed by the U.S.

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War Trade Board)2 states that the links between these organizations andtheir financing of the Bolshevik Revolution show how "the link betweenJewish multi-millionaires and Jewish proletarians was forged." Thereport goes on to list a large number of Bolsheviks who were also Jews

and then describes the actions of Paul Warburg, Judus Magnes, Kuhn,Loeb & Company, and Speyer & Company.

The report ends with a barb at "International Jewry" and places theargument into the context of a Christian-Jewish conflict backed up byquotations from the Protocols of Zion. Accompanying this report is aseries of cables between the State Department in Washington and theAmerican embassy in London concerning the steps to be taken with

these documents:

3

5399 Great Britain, TEL. 3253 i pm

October 16, 1919 In Confidential FileSecret for Winslow from Wright. Financial aid to Bolshevism &Bolshevik Revolution in Russia from prominent Am. Jews: Jacob Schiff,Felix Warburg, Otto Kahn, Mendell Schiff, Jerome Hanauer, MaxBreitung & one of the Guggenheims. Document re- in possession of 

Brit. police authorities from French sources. Asks for any facts re-.* * * * *

Oct. 17 Great Britain TEL. 6084, noon r c-h 5399 Very secret. Wrightfrom Winslow. Financial aid to Bolshevik revolution in Russia from prominent Am. Jews. No proof re- but investigating. Asks to urge Brit.authorities to suspend publication at least until receipt of document byDept.

* * * * *

 Nov. 28 Great Britain TEL. 6223 R 5 pro. 5399FOR WRIGHT. Document re financial aid to Bolsheviki by prominentAmerican jews. Reports — identified as French translation of a

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statement originally prepared in English by Russian citizen in Am. etc.Seem most unwise to give — the distinction of publicity.

It was agreed to suppress this material and the files conclude, "I think we

have the whole thing in cold storage."

Another document marked "Most Secret" is included with this batch of material. The provenance of the document is unknown; it is perhaps FBIor military intelligence. It reviews a translation of the Protocols of theMeetings of the Wise Men of Zion, and concludes:

In this connection a letter was sent to Mr. W. enclosing a memorandumfrom us with regard to certain information from the American Military

Attache to the effect that the British authorities had letters interceptedfrom various groups of international Jews setting out a scheme for worlddominion. Copies of this material will be very useful to us.

This information was apparently developed and a later Britishintelligence report makes the flat accusation:

SUMMARY: There is now definite evidence that Bolshevism is aninternational movement controlled by Jews; communications are passing between the leaders in America, France, Russia and England with a viewto concerted action....4

However, none of the above statements can be supported with hardempirical evidence. The most significant information is contained in the paragraph to the effect that the British authorities possessed "lettersintercepted from various groups of international Jews setting out ascheme for world dominion." If indeed such letters exist, then they

would provide support (or nonsupport) for a presently unsubstantiatedhypothesis: to wit, that the Bolshevik Revolution and other revolutionsare the work of a worldwide Jewish conspiracy.

Moveover, when statements and assertions are not supported by hardevidence and where attempts to unearth hard evidence lead in a circle

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 back to the starting point — particularly when everyone is quotingeveryone else — then we must reject the story as spurious. There is no

concrete evidence that Jews were involved in the Bolshevik Revolution

because they were Jewish. There may indeed have been a higher 

 proportion of Jews involved, but given tsarist treatment of Jews, whatelse would we expect? There were probably many Englishmen or  persons of English origin in the American Revolution fighting theredcoats. So what? Does that make the American Revolution an Englishconspiracy? Winston Churchill's statement that Jews had a "very greatrole" in the Bolshevik Revolution is supported only by distortedevidence. The list of Jews involved in the Bolshevik Revolution must beweighed against lists of non-Jews involved in the revolution. When this

scientific procedure is adopted, the proportion of foreign JewishBolsheviks involved falls to less than twenty percent of the total number of revolutionaries — and these Jews were mostly deported, murdered, or sent to Siberia in the following years. Modern Russia has in factmaintained tsarist anti-Semitism.

It is significant that documents in the State Department files confirm thatthe investment banker Jacob Schiff, often cited as a source of funds for the Bolshevik Revolution, was in fact against support of the Bolshevik 

regime.5 This position, as we shall see, was in direct contrast to theMorgan-Rockefeller promotion of the Bolsheviks.

The persistence with which the Jewish-conspiracy myth has been pushedsuggests that it may well be a deliberate device to divert attention fromthe real issues and the real causes. The evidence provided in this book suggests that the New York bankers who were also Jewish had relativelyminor roles in supporting the Bolsheviks, while the New York bankers

who were also Gentiles (Morgan, Rockefeller, Thompson) had major roles.

What better way to divert attention from the real operators than by themedieval bogeyman of anti-Semitism?

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Footnotes:

1See Appendix 3 for Schiff's actual role.

2

The anonymous author was a Russian employed by the U.S. War TradeBoard. One of the three directors of the U.S. War Trade Board at thistime was John Foster Dulles.

3U.S. State Dept. Decimal File, 861.00/5399.

4Great Britain, Directorate of Intelligence, A Monthly Review of the

 Progress of Revolutionary Movements Abroad, no. 9, July 16, 1913(861.99/5067).

5See Appendix 3.

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Appendix III

SELECTED DOCUMENTS FROMGOVERNMENT FILES OF THEUNITED STATES AND GREAT BRITAIN

 Note: Some documents comprise several papers that form a related 

 group.

DOCUMENT NO. 1 Cable from Ambassador Francis in Petrograd toU.S. State Department and related letter from Secretary of State RobertLansing to President Woodrow Wilson (March 17, 1917)

DOCUMENT NO. 2 British Foreign Office document (October 1917)claiming Kerensky was in the pay of the German government and aidingthe Bolsheviks

DOCUMENT NO. 3 Jacob Schiff of Kuhn, Loeb & Company and his position on the Kerensky and Bolshevik regimes (November 1918)

DOCUMENT NO. 4 Memorandum from William Boyce Thompson,director of the Federal Reserve Bank of New York, to the British primeminister David Lloyd George (December 1917)

DOCUMENT NO. 5 Letter from Felix Frankfurter to Soviet agentSanteri Nuorteva (May 9, 1918)

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to obey the Emperor's order of the adjournment. Rodzianko, president of the Douma, issuing orders over his own signature. Ministry reported tohave resigned. Ministers found are taken before the Douma, also manyRussian officers and other high officials. Most if not all regiments

ordered to Petrograd have joined the revolutionists after arrival.American colony safe. No knowledge of any injuries to Americancitizens.

FRANCIS,American Ambassador 

On receipt of the preceding cable, Robert Lansing, Secretary of State,made its contents available to President Wilson (861.00/273):

PERSONAL AND CONFIDENTIAL

My Dear Mr. President:

I enclose to you a very important cablegram which has just come fromPetrograd, and also a clipping from the New York WORLD of thismorning, in which a statement is made by Signor Scialoia, Minister without portfolio in the Italian Cabinet, which is significant in view of Mr. Francis' report. My own impression is that the Allies know of thismatter and I presume are favorable to the revolutionists since the Court party has been, throughout the war, secretely pro-German.

Faithfully yours,ROBERT LANSING

Enclosure:The President,The White House

COMMENT

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The significant phrase in the Lansing-Wilson letter is "My ownimpression is that the Allies know of this matter and I presume arefavorable to the revolutionists since the Court party has been, throughoutthe war, secretely pro-German." It will be recalled (chapter two) that

Ambassador Dodd claimed that Charles R. Crane, of Westinghouse andof Crane Co. in New York and an adviser to President Wilson, wasinvolved in this first revolution.

DOCUMENT NO. 2

Memorandum from Great Britain Foreign Office file FO 371/ 2999 (TheWar — Russia), October 23, 1917, file no. 3743.

DOCUMENT

Personal (and) Secret.

Disquieting rumors have reached us from more than one source thatKerensky is m German pay and that he and his government are doingtheir utmost to weaken (and) disorganize Russia, so as to arrive at asituation when no other course but a separate peace would be possible.Do you consider that there is any ground for such insinuations, and thatthe government by refraining from any effective action are purposelyallowing the Bolshevist elements to grow stronger?

If it should be a question of bribery we might be able to competesuccessfully if it were known how and through what agents it could bedone, although it is not a pleasant thought.

COMMENT

Refers to information that Kerensky was in German pay.

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DOCUMENT NO. 3

Consists of four parts:

(a) Cable from Ambassador Francis, April 27, 1917, in Petrograd toWashington, D.C., requesting transmission of a message from prominentRussian Jewish bankers to prominent Jewish bankers in New York andrequesting their subscription to the Kerensky Liberty Loan (861.51/139).

(b) Reply from Louis Marshall (May 10, 1917) representing AmericanJews; he declined the invitation while expressing support for theAmerican Liberty Loan (861.51/143).

(c) Letter from Jacob Schiff of Kuhn, Loeb (November 25, 1918) toState Department (Mr. Polk) relaying a message from Russian Jewish banker Kamenka calling for Allied help against the Bolsheviks("because Bolshevist government does not represent Russian People").

(d) Cable from Kamenka relayed by Jacob Schiff.

DOCUMENTS

(a) Secretary of StateWashington.1229, twenty-seventh.

Please deliver following to Jacob Schiff, Judge Brandies [ sic] , Professor Gottheil, Oscar Strauss [sic], Rabbi Wise, Louis Marshall andMorgenthau:

"We Russian Jews always believed that liberation of Russia meant alsoour liberation. Being deeply devoted to country we placed implicit trusttemporary Government. We know the unlimited economic power of Russia and her immense natural resources and the emancipation weobtained will enable us to participate development country. We firmly

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 believe that victorious finish of the war owing help our allies and UnitedStates is near.

Temporary Government issuing now new public loan of freedom and we

feel our national duty support loan high vital for war and freedom. Weare sure that Russia has an unshakeable power of public credit and willeasily bear a.11 necessary financial burden. We formed specialcommittee of Russian Jews for supporting loan consistingrepresentatives financial, industrial trading circles and leading publicmen.

We inform you here of and request our brethern beyong [ sic] the seas tosupport freedom of Russian which became now case humanity andworld's civilization. We suggest you form there special committee andlet us know of steps you may take Jewish committee support successloan of freedom. Boris Kamenka, Chairman, Baron Alexander Gunzburg, Henry Silosberg."

FRANCIS

* * * * *

(b) Dear Mr. Secretary:

After reporting to our associates the result of the interview which youkindly granted to Mr. Morgenthau, Mr. Straus and myself, in regard tothe advisability of calling for subscriptions to the Russian Freedom Loanas requested in the cablegram of Baron Gunzburg and Messrs. Kamenkaand Silosberg of Petrograd, which you recently communicated to us, wehave concluded to act strictly upon your advice. Several days ago we

 promised our friends at Petrograd an early reply to their call for aid. Wewould therefore greatly appreciate the forwarding of the followingcablegram, provided its terms have your approval:

"Boris Kamenka,Don Azov Bank, Petrograd.

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Our State Department which we have consulted regards any presentattempt toward securing public subscriptions here for any foreign loansinadvisable; the concentration of all efforts for the success of Americanwar loans being essential, thereby enabling our Government to supply

funds to its allies at lower interest rates than otherwise possible. Our energies to help the Russian cause most effectively must thereforenecessarily be directed to encouraging subscriptions to AmericanLiberty Loan. Schiff, Marshall, Straus, Morgenthau, Wise, Gonheil."

You are of course at liberty to make any changes in the phraseology of this suggested cablegram which you may deem desirable and which willindicate that our failure to respond directly to the request that has come

to us is due to our anxiety to make our activities most efficient.May I ask you to send me a copy of the cablegram as forwarded, with amemorandum of the cost so that the Department may be promptlyreimbursed.

I am, with great respect,Faithfully yours,

[sgd.] Louis Marshall

The Secretary of StateWashington, D.C.

* * * * *

(c) Dear Mr. Polk:

Will you permit me to send you copy of a cablegram received this

morning and which I think, for regularity's sake, should be brought tothe notice of the Secretary of State or your good self, for suchconsideration as it might be thought well to give this.

Mr. Kamenka, the sender of this cablegram, is one of the leading men inRussia and has, I am informed, been financial advisor both of the PrinceLvoff government and of the Kerensky government. He is President of 

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the Banque de Commerce de l'Azov Don of Petrograd, one of the mostimportant financial institutions of Russia, but had, likely, to leave Russiawith the advent of Lenin and his "comrades."

Let me take this opportunity to send sincere greetings to you and Mrs.Polk and to express the hope that you are now in perfect shape again,and that Mrs. Polk and the children are in good health.

Faithfully yours,[sgd.] Jacob H. Schiff 

Hon. Frank L. Polk Counsellor of the State Dept.

Washington, D.C.

MM-Encl.

[Dated November 25, 1918]

* * * * *

(d) Translation:

The complete triumph of liberty and right furnishes me a newopportunity to repeat to you my profound admiration for the nobleAmerican nation. Hope to see now quick progress on the part of theAllies to help Russia in reestablishing order. Call your attention also to pressing necessity of replacing in Ukraine enemy troops at the verymoment of their retirement in order to avoid Bolshevist devastation.Friendly intervention of Allies would be greeted everywhere withenthusiasm and looked upon as democratic action, because Bolshevistgovernment does not represent Russian people. Wrote you September 19th. Cordial greetings.

[sgd.] Kamenka

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COMMENT

This is an important series because it refutes the story of a Jewish bank 

conspiracy behind the Bolshevik Revolution. Clearly Jacob Schiff of Kuhn, Loeb was not interested in supporting the Kerensky Liberty Loanand Schiff went to the trouble of drawing State Department attention toKamenka's pleas for Allied intervention against the Bolsheviks.Obviously Schiff and fellow banker Kamenka, unlike J.P. Morgan andJohn D. Rockefeller, were as unhappy about the Bolsheviks as they had been about the tsars.

DOCUMENT NO. 4

Description

Memorandum from William Boyce Thompson (director of the FederalReserve Bank of New York) to Lloyd George (prime minister of GreatBritain), December 1917.

DOCUMENT

FIRST

The Russian situation is lost and Russia lies entirely open to unopposedGerman exploitation unless a radical reversal of policy is at onceundertaken by the Allies.

SECOND

Because of their shortsighted diplomacy, the Allies since the Revolutionhave accomplished nothing beneficial, and have done considerable harmto their own interests.

THIRD

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The Allied representatives in Petrograd have been lacking insympathetic understanding of the desire of the Russian people to attaindemocracy. Our representatives were first connected officially with theCzar's regime. Naturally they have been influenced by that environment.

FOURTH

Meanwhile, on the other hand, the Germans have conducted propagandathat has undoubtedly aided them materially in destroying theGovernment, in wrecking the army and in destroying trade and industry.If this continues unopposed it may result in the complete exploitation of the great country by Germany against the Allies.

FIFTH

I base my opinion upon a careful and intimate study of the situation bothoutside and inside official circles, during my stay in Petrograd betweenAugust 7 and November 29, 1917.

SIXTH

"What can be done to improve the situation of the Allies in Russia"?

The diplomatic personnel, both British and American, should bechanged to one democratic in spirit and capable of sustaining democraticsympathy.

There should be erected a powerful, unofficial committee, withheadquarters in Petrograd, to operate in the background, so to speak, theinfluence of which in matters of policy should be recognized andaccepted by the DIPLOMATIC, CONSULAR and MILITARY officialsof the Allies. Such committee should be so composed in personnel as tomake it possible to entrust to it wide discretionary powers. It would presumably undertake work in various channels. The nature of whichwill become obvious as the task progress. es; it. would aim to meet allnew conditions as they might arise.

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SEVENTH

It is impossible now to define at all completely the scope of this newAllied committee. I can perhaps assist to a better understanding of its

 possible usefulness and service by making a brief reference to the work which I started and which is now in the hands of Raymond Robins, whois well and favorably known to Col. Buchan — a work which in thefuture will undoubtedly have to be somewhat altered and added to inorder to meet new conditions. My work has been performed chieflythrough a Russian "Committee on Civic Education" aided by MadameBreshkovsky, the Grandmother of the Revolution. She was assisted byDr. David Soskice, the private secretary of the then Prime Minister 

Kerensky (now of London); Nicholas Basil Tchaikovsky, at one timeChairman of the Peasants Co-operative Society, and by other substantialsocial revolutionaries constituting the saving element of democracy as between the extreme "Right" of the official and property-owning class,and the extreme "Left" embodying the most radical elements of thesocialistic parties. The aim of this committee, as stated in a cablemessage from Madame Breshkovsky to President Wilson, can begathered from this quotation: "A widespread education is necessary tomake Russia an orderly democracy. We plan to bring this education to

the soldier in the camp, to the workman in the factory, to the peasant inthe village." Those aiding in this work realized that for centuries themasses had been under the heel of Autocracy which had given them not protection but oppression; that a democratic form of government inRussian could be maintained only BY THE DEFEAT OF THEGERMAN ARMY; BY THE OVERTHROW OF GERMANAUTOCRACY. Could free Russia, unprepared for great governmentalresponsibilities, uneducated, untrained, be expected long to survive with

imperial Germany her next door neighbor? Certainly not. DemocraticRussia would become speedily the greatest war prize the world has evenknown.

The Committee designed to have an educational center in each regimentof the Russian army, in the form of Soldiers' Clubs. These clubs were

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organized as rapidly as possible, and lecturers were employed to addressthe soldiers. The lecturers were in reality teachers, and it should beremembered that there is a percentage of 90 among the soldiers of Russia who can neither read nor write. At the time of the Bolshevik 

outbreak many of these speakers were in the field making a fineimpression and obtaining excellent results. There were 250 in the city of Moscow alone. It was contemplated by the Committee to have at least5000 of these lecturers. We had under publication many newspapers of the "A B C" class, printing matter in the simplest style, and wereassisting about 100 more. These papers carried the appeal for patriotism,unity and co-ordination into the homes of the workmen and the peasants.

After the overthrow of the last Kerensky government we materiallyaided the dissemination of the Bolshevik literature, distributing itthrough agents and by aeroplanes to the German army. If the suggestionis permissible, it might be well to consider whether it would not bedesirable to have this same Bolshevik literature sent into Germany andAustria across the West and Italian fronts.

EIGHTH

The presence of a small number of Allied troops in Petrograd wouldcertainly have done much to prevent the overthrow of the Kerenskygovernment in November. I should like to suggest for your consideration, if present conditions continue, the concentration of all theBritish and French Government employes in Petrograd, and if thenecessity should arise it might be formed into a fairly effective force. Itmight be advisable even to pay a small sum to a Russian force. There isalso a large body of volunteers recruited in Russia, many of themincluded in the Inteligentzia of "Center" class, and these have donesplendid work in the trenches. They might properly be aided.

 NINTH

If you ask for a further programme I should say that it is impossible togive it now. I believe that intelligent and courageous work will still

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Thank you very much for your letter of the 4th. I knew you wouldunderstand the purely friendly and wholly unofficial character of our talk, and I appreciate the prompt steps you have taken to correct your Sirola* letter. Be wholly assured that nothing has transpired which

diminishes my interest in the questions which you present. Quite thecontrary. I am much interested in** the considerations you areadvancing and for the point of view you are urging. The issues*** atstake are the interests that mean much for the whole world. To meetthem adequately we need all the knowledge and wisdom we can possiblyget****.

Cordially yours,

Felix Frankfurter Santeri Nuorteva, Esq.

* Yrjo Sirola was a Bolshevik and commissar in Finland.** Original text, "continually grateful to you for."*** Original text, "interests."**** Original text added "these days."

COMMENT

This letter by Frankfurter was written to Nuorteva/Nyberg, a Bolshevik agent in the United States, at a time when Frankfurter held an official position as special assistant to Secretary of War Baker in the War Department. Apparently Nyberg was willing to change a letter tocommissar "Sirola" according to Frankfurter's instructions. The Lusk Committee acquired the original Frankfurter draft including

Frankfurter's changes and not the letter received by Nyberg.

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THE SOVIET BUREAU IN 1920

  Position Name Citizenship Born Former 

 Employment 

Representative of USSR 

Ludwig C.A.K.MARTENS

German Russia V-P of Weinberg &Posner 

Engineer ing(120 Broadway)

Officemanager 

GregoryWEINSTEIN

Russian Russia Journalist

Secretary Santeri NUORTEVA

Finnish Russia Journalist

Assistantsecretary

KennethDURANT

U.S. U.S. (1) U.S.Committee on

PublicInformation(2) Former aideto ColonelHouse

Privatesecre taryto NUOR 

TEVA

Dorothy KEEN U.S. U.S. High school

Translator Mary MODELL Russian Russia School inRussia

File clerk Alexander COLEMAN

U.S. U.S. High school

Telephone Blanche Russian Russia High school

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clerk ABUSHEVITZOfficeattendant

 Nestor KUNTZEVICH

Russian Russia — 

Militaryexpert

Lt. Col. BorisTagueeff Roustam BEK 

Russian Russia Military criticon Daily

 Express

(London)Commercial Department

Director A. HELLER Russian U.S. InternationalOxy genCompany

Secretary Ella TUCH Russian U.S. U.S. firms

Clerk RoseHOLLAND

U.S. U.S. Gary SchoolLeague

Clerk HenriettaMEEROWICH

Russian Russia Social worker 

Clerk Rose BYERS Russian Russia SchoolStatistician Vladimir 

OLCHOVSKYRussian Russia Russian Army

Information Department

Director Evans CLARK U.S. U.S. PrincetonUniversity

Clerk Nora G.SMITHMAN

U.S. U.S. Ford PeaceExpedition

Steno Etta FOX U.S. U.S. War TradeBoard

 — Wilfred R.HUMPHRIES

U.K. — 

American RedCross

Technical Dept.

Director Arthur ADAMS Russian U.S. —  Educational Dept.

Director WilliamMALISSOFF

Russian U.S. ColumbiaUniversity

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Medical Dept.

Director Leo A.HUEBSCH

Russian U.S. Medical doctor  

D. H.DUBROWSKY

Russian U.S. Medical doctor 

Legal Dept.

Director MorrisHILLQUIT

Lithuanian — —  

Counsel

retained:

Charles RECHTDudley FieldMALONEGeorge CordonBATTLE

Dept. of Economics &

Statistics

Director Isaac A.HOURWICH

Russian U.S. U.S. Bureau of  Census

Eva JOFFE Russian U.S. National ChildLabor Commission

Steno ElizabethGOLDSTEIN

Russian U.S. Student

Editorial Staff of SovietRussiaManagingeditor 

Jacob w.HARTMANN

U.S. U.S. College of Cityof New York 

Steno Ray TROTSKY Russian Russia StudentTranslator Theodnre

BRESLAUER Russian Russia

 — 

Clerk VastlyIVANOFF

Russian Russia — 

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Clerk DavidOLDFIELD

Russian Russia — 

Translator J.BLANKSTEIN

Russian Russia — 

SOURCE: U.S., House, Conditions in Russia (Committee onForeign Affairs), 66th Cong., 3rd sess. (Washington,D.C., 1921).See also British list in U.S. State Department DecimalFile, 316-22-656, which also has the name of JuliusHammer.

DOCUMENT NO. 7

DESCRIPTION

Letter from National City Bank of New York to the U.S. Treasury, April15, 1919, with regard to Ludwig Martens and his associate Dr. JuliusHammer (316-118).

DOCUMENT

The National City Bank of New York  New York, April 15, 1919

Honorable Joel Rathbone,Assistant Secretary of the TreasuryWashington, D.C.

Dear Mr. Rathbone:

I beg to hand you herewith photographs of two documents which wehave received this morning by registered mail from a Mr. L. Martenswho claims to be the representative in the United States of the Russian

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DOCUMENT

Department of Justice

Bureau of Investigation,15 Park Row, New York City, N. Y.,August 10, 1920

Director Bureau of InvestigationUnited States Department of Justice, Washington, D.C.

Dear Sir: Confirming telephone conversation with Mr. Ruch today, I amtransmitting herewith original documents taken from the effects of B. L.

Bobroll, steamship Frederick VIII.

The letter addressed Mr. Kenneth Durant, signed by Bill, dated August3, 1920, together with the translation from "Pravda," July 1, 1920,signed by Trotzki, and copies of cablegrams were found inside the blueenvelope addressed Mr. Kenneth Durant, 228 South Nineteenth Street,Philadelphia, Pa. This blue envelope was in turn sealed inside the whiteenvelope attached.

Most of the effects of Mr. Bobroff consisted of machinery catalogues,specifications, correspondence regarding the shipment of variousequipment, etc., to Russian ports. Mr. Bobroff was closely questioned byAgent Davis and the customs authorities, and a detailed report of samewill be sent to Washington.

Very truly yours,G. F. Lamb,

Division Superintendent

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LETTER TO KENNETH DURANT

Dear Kenneth: Thanks for your most welcome letter. I have felt verymuch cut off and hemmed in, a feeling which has been sharply

emphasized by recent experiences. I have felt distressed at inability toforce a different attitude toward the bureau and to somehow get funds toyou. To cable $5,000 to you, as was done last week, is but a sorry joke. Ihope the proposal to sell gold in America, about which we have beencabling recently, will soon be found practicable. Yesterday we cabledasking if you could sell 5,000,000 rubles at a minimum of 45 cents, present market rate being 51.44 cents. That would net at least$2,225,000. L's present need is $2,000,000 to pay Niels Juul & Co., in

Christiania, for the first part of the coal shipment from America toVardoe, Murmansk, and Archangel. The first ship is nearing Vardoe andthe second left New York about July 28. Altogether, Niels Juul & Co., or rather the Norges' Bank, of Christiania, on their and our account, hold$11,000,000 gold rubles of ours, which they themselves brought fromReval to Christiania, as security for our coal order and the necessarytonnage, but the offers for purchase of this gold that they have so far  been able to get are very poor, the best being $575 per kilo, whereas therate offered by the American Mint or Treasury Department is now

$644.42, and considering the large sum involved it would be a shame tolet it go at too heavy a loss. I hope that ere you get this you will have been able to effect the sale, at the same time thus getting a quarter of amillion dollars or more for the bureau. If we can't in some way pay the$2,000,000 in Christiania, that was due four days ago, within a veryshort time, Niels Juul & Co. will have the right to sell our gold that theynow hold at the best price then obtainable, which, as stated above, isquite low.

We don't know yet how the Canadian negotiations are going on. Weunderstand Nuorteva turned over the strings to Shoen when N.'s arrestseemed imminent. We don't at this writing know where Nuorteva is. Our guess is that after his enforced return to England from Esbjerg,Denmark, Sir Basil Thomson had him shipped aboard a steamer for 

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Reval, but we have not yet heard from Reval that he has arrived there,and we certainly would hear from Goukovski or from N. himself.Humphries saw Nuorteva at Esbjerg, and is himself in difficulties withthe Danish police because of it. All his connections are being probed for;

his passport has been taken away: he has been up twice for examination,and it looks as if he will be lucky if he escapes deportation. It was twoweeks ago that Nuorteva arrived at Esbjerg, 300 miles from here, buthaving no Danish visé, the Danish authorities refused to permit him toland, and he was transferred to a steamer due to sail at 8 o'clock thefollowing morning. By depositing 200 kroner he was allowed shoreleave for a couple of hours. Wanting to get Copenhagen on long-distance wire and having practically no more money, he once more

 pawned that gold watch of his for 25 kroner, therewith getting in touchwith Humphries, who within half an hour jumped aboard the night train,slept on the floor, and arrived at Esbjerg at 7:30. Humphries found Nuorteva, got permission from the captain to go aboard, had 20 minuteswith N., then had to go ashore and the boat sailed. Humphries was theninvited to the police office by two plain-clothes men, who had beenobserving the proceedings. He was closely questioned, address taken,then released, and that night took train back to Copenhagen. He senttelegrams to Ewer, of Daily Herald, Shoen, and to Kliskho, at 128 NewBond Street, urging them to be sure and meet Nuorteva's boat, so that N.couldn't again be spirited away, but we don't know yet just whathappened. The British Government vigorously denied that they had anyintention of sending him to Finland. Moscow has threatened reprisals if anything happens to him. Meantime, the investigation of H. has begun.He was called upon at his hotel by the police, requested to go toheadquarters (but not arrested), and we understand that his case is now before the minister of justice. Whatever may be the final outcome,

Humphries comments upon the reasonable courtesy shown him,contrasting it with the ferocity of the Red raids in America.

He found that at detective headquarters they knew of some of hisoutgoing letters and telegrams.

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Give my regards to the people of your circle that I know. With all goodwishes to you.

Sincerely yours,

Bill

The batch of letters you sent — 5 Cranbourne Road, Charlton cumHardy, Manchester, has not yet arrived.

L's recommendation to Moscow, since M. asked to move to Canada, isthat M. should be appointed there, and that N., after having some weeksin Moscow acquainting himself first hand, should be appointedrepresentative to America.

L. is sharply critical of the bureau for giving too easily visés andrecommendations. He was obviously surprised and incensed when B.reached here with contracts secured in Moscow upon strength of lettersgiven to him by M. The later message from M. evidently didn't reachMoscow. What L. plans to do about it I don't know. I would suggest thatM. cable in cipher his recommendation to L. in this matter. L. wouldhave nothing to do with B. here. Awkward situation may be created.

L. instanced also the Rabinoff recommendation.

Two envelopes, Mr. Kenneth Durant, 228 South Nineteenth Street,Philadelphia, Pa., U.S.A.

SOURCE: U.S. State Department Decimal File, 316-119-458/64.

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NOTE: IDENTIFICATION OF INDIVIDUALS

William (Bill) L.BOBROFF

Soviet courier and agent.Operated Bobroff Foreign

Trading and EngineeringCompany of Milwaukee.Invented the voting system usedin the Wisconsin Legilature.

Kenneth DURANT Aide to Colonel House; see text.SHOEN Employed by International

Oxygen Co., owned by Heller, a prominent financier and

Communist.EWER Soviet agent, reporter for   London Daily Herald .

KLISHKO Soviet agent in Scandinavia NUORTEVA Also known as Alexander 

 Nyberg, first Sovietrepresentative in United States;see text.

Sir BasilTHOMPSON Chief of British Intelligence

"L" LITVINOFF."H" Wilfred Humphries, associated

with Martens and Litvinoff,member of Red Cross in Russia.

KRASSINBolshevik commissar of tradeand labor, former head of 

Siemens-Schukert in Russia.

COMMENTS

This letter suggests close ties between Bobroff and Durant.

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DOCUMENT NO. 9

DESCRIPTION

Memorandum referring to a request from Davison (Morgan partner) toThomas Thacher (Wall Street attorney associated with the Morgans) and passed to Dwight Morrow (Morgan partner), April 13, 1918.

DOCUMENT

The Berkeley Hotel, LondonApril 13th, 1918.

Hon. Walter H. Page,American Ambassador to England,London.

Dear Sir:

Several days ago I received a request from Mr. H. P. Davison, Chairmanof the War Council of the American Red Cross, to confer with Lord Northcliffe regarding the situation in Russia, and then to proceed toParis for other conferences. Owing to Lord Northcliffe's illness I havenot been able to confer with him, but am leaving with Mr. Dwight W.Morrow, who is now staying at the Berkeley Hotel, a memorandum of 

the situation which Mr. Morrow will submit to Lord Northcliffe on thelatter's return to London.

For your information and the information of the Department I enclose toyou, herewith, a copy of the memorandum.

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Respectfully yours,[sgd.] Thomas D. Thacher.

COMMENT

Lord Northcliffe had just been appointed director of propaganda. This isinteresting in the light of William B. Thompson's subsidizing of Bolshevik propaganda and his connection with the Morgan-Rockefeller interests.

DOCUMENT NO. 10

DESCRIPTION

This document is a memorandum from D.C. Poole, Division of RussianAffairs in the Department of State, to the secretary of state concerning aconversation with Mr. M. Oudin of General Electric.

DOCUMENT

May 29, 1922

Mr. Secretary:

Mr. Oudin, of the General Electric Company, informed me this morningthat his company feels that the time is possibly approaching to beginconversations with Krassin relative to a resumption of business inRussia. I told him that it is the view of the Department that the course to

 be pursued in this matter by American firms is a question of business judgment and that the Department would certainly interpose no obstaclesto an American firm resuming operations in Russia on any basis whichthe firm considered practicable.

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He said that negotiations are now in progress between the GeneralElectric Company and the Allgemeine Elektrizitats Gesellschaft for aresumption of the working agreement which they had before the war. Heexpects that the agreement to be made will include a provision for 

cooperation of Russia.

Respectfully,DCP D.C. Poole

COMMENT

This is an important document as it relates to the forthcomingresumption of relations with Russia by an important American company.It illustrates that the initiative came from the company, not from theState Department, and that no consideration was given to the effect of 

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transfer of General Electric technology to a self-declared enemy. ThisGE agreement was the first step down a road of major technical transfersthat led directly to the deaths of 100,000 Americans and countless allies.